Posted by Farris on August 12, 2003 at 19:50:08:
Get a one year note and pay off the existing mortgage w/ the note. Pay the partner who wants cash now their 16K of equity (120K-88K=32K/2=16). Rent the townhouse to the other party for 1200 per month (7200 in 6 mo.)and make that party wait the six months for their half of the equity since they “have” to stay in the house. Your ace up the sleeve. At the end of six months pay out what is left of your note to other tenant.
Now, you either list the house for 126K since you’ve had it for 6 months now and it could take another 6 months to sell; so, one year later and let’s say 5% appreciation, it’s worth more now. Pocket the 6K left from paying off the note plus the 7200 you made in rent for the six months. 13,200 profit in one year!
Or, take the 7200 as a down payment (your tenants $) and finance the 112,800 for a low interest 5 year fixed balloon amoritized 20 years and at 1200 a month for rent it should cash flow nicely. Then sell it in five years for a good profit.
Just a couple of thoughts. Hope this helps.