Need immediate help - Strategy - Posted by Ken

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.

Need immediate help - Strategy - Posted by Ken

Posted by Ken on August 12, 2003 at 19:09:01:

I have a deal that I’m looking at and here are the specs:

Townhouse, 3br, 2ba - Good condition
Comps reveal easy and quick sell at $120K
Current mortg. bal. $88K and Monthly payments $895
Will rent for $1200 plus

This is a little complex because its a divorce situation and one of them wants/has to stay in property for about 6 months while looking for a place to move. The partner who will be staying has already agreed to lease back from me for the duration of the 6 months. I am looking at Lease Optioning, and Subject To but prefer L/O due to familiarity. Anyway, one of them is demanding to get their name out of the title and wants nothing to do with it, however, if there’s going to be any cash payment for equity, she wants half.

I would appreciate any help in structuring this deal because I see a profit.