Posted by Ed Garcia on June 13, 2006 at 09:54:46:
I find it amusing to watch you try to justify yourself.
It looks to me like GMann shook the monkey out of the tree.
You start out telling me that you?re very surprised at my lack of knowledge on this type of cash back deal. the seller would not incur any extra capital gains what so ever.
I go back and tell you that?s I made mention of credits off setting capital gains in the post and why it has to be handled conservatively and suggested you read the post a little more carefully. You came back and said you understood the post and disagreed with it and then gave a poor example that?s not even applicable.
After the GMann puts the squeeze on you, you then say ?anyway I could have my facts wrong as I did not really do this deal. but heard from another broker, maybe its one of those things that?s to good to be true.?
You?ve already made yourself look like a fool so I?m not going to grind you. Instead I?m going to teach you.
Going back to the example of the deal that you did not do.
How can you compare a house which is financed in a residential lending community to a 10 unit apartment building that?s income producing and financed in the commercial lending community. There?s absolutely no comparison.
As far as price is concerned or value it makes no difference what you think it?s worth the lender has its own criteria of value independently from the appraisers based on Cap Rate or Gross Rent Multiplier, and a 1.2 debt coverage ratio. You were comparing apples to oranges. The values of Residential are heaviest based on Market. The value on Commercial is heaviest based on Income.
Tony, my suggestion is, rather then try to win a disagreement on this board, try to learn from it.