Posted by Paul (ok) on January 10, 1999 at 24:57:14:
just seen your reply to adam are you still online?
create note/family(long) - Posted by paul(OK)
Posted by paul(OK) on January 08, 1999 at 08:12:52:
yeah i should have known better to mix family and business but i wanted to help them out of a jam (I think we traded places). I purchased an excellent fixer property just cosmetic for 20k(hard money)I was to scared of notes at the time to try to create a note to myself. The fair market value and comparisons sales is 50k after the fixup. I was feeling real good about the deal and told my brother. I listened (spectator sport), as I told him to go take a look he might be interested in the house. first we tried conventional financing at 35k his credit is 550/560 didn’t work with the amount of nothing down he had and I dont want to carry 20% then forgive the loan (not my style). Non conventional didn’t seem to encouraging either. Now I’ve tried swapping quit claim deeds with him i’ve given him 60 days to find some interested parties before the quit claim back from him. Made him sign that first before any contracts. This long story is because I would like several of the “big guys/gals” to explain the flaws in my thinking maybe suggest some different approaches or just fine tune the process. I know the house is good. I have rentals and after 6 months I know I really don’t want any more. Could a note be created on this house with any type of success. What type of discounts would I be looking at. I had thought of creating an interest only payments for a year with a balloon @ 13% or would I need to start higher? am I being cautious or stalling? Would appreciate all input no matter how scathing. Thanks in advance.
Re: create note/family(long) - Posted by David Alexander
Posted by David Alexander on January 08, 1999 at 10:04:45:
Have you fixed the house up? If not, what is it’s current value? How long is your hard money loan for and at what interest rate, any early payoff penalties,interest only etc. More details and maybe someone can help. Your brother, does he want the house to live in? Do you need cash now? How much can
your brother afford to pay?
David Alexander
Re: create note/family(long) - Posted by Paul(OK)
Posted by Paul(OK) on January 08, 1999 at 11:20:45:
The house is fixed up. The loan is for 12 years 12.75% principal and interest $275 monthly. no prepayment penalty. My brother wants to live in the house. I need at least 5k now. He can afford $425.
How about… - Posted by David Alexander
Posted by David Alexander on January 09, 1999 at 01:12:55:
Sell the house to your brother for 30,000
425/month @ 13.675% for 144 months on a contract for deed. Your cash flow will be 150/month. Let it season
up a few months and sell the cash flow or you could possibly sell it at the close. I would suggest using a service company to take the payments.
Depends on yield as to how many months of cash flow you would have to give up. Example, @ 24% yield, you would have to give up almost 60 months of cash flow.
David Alexander