Re: My thoughts… - Posted by JohnBoy
Posted by JohnBoy on May 23, 2005 at 13:26:17:
C’mon, Sean!
I know what 50% interest in ownership is. But if I’m looking at buying 50% interest, I don’t care about what’s owed on it. I’m only interested in what the equity is! How much EQUITY am I going to get for my money???
You’re not going to give someone $15k to buy 50% ownership interest on a property worth $100k where they owe a $100k, or $80k, or $70k, or $60k, or even $50k, where you are going to bail them out of foreclosure, let them remain in the property when that can’t afford it, only to risk having them end up in foreclosure again!
Now if you were buying 50% interest where there is only $50k in equity on a $100k property, you might by in for that where you are saving the house from foreclosure and you are going to sell the house and cash everyone out. In that case, I’d be getting my $25k equity, plus my $15k, and the seller gets their remaining $10k left.
If that was the case I could just give the seller the $10k in exchange for deeding the property over to me, I reinstate the loan and they move on! Otherwise, NEXT!
Would YOU buy in for 50% ownership on a $100k house, where there is $50k in equity, and let the seller remain in the property? I know I wouldn’t.
Now for 50% interest in a $200k house where there is $100k in equity, I may be willing to risk my $15k to buy in and let the seller remain in the property and retain half ownership. In that case my $15k is well secured with plenty of equity should they default again.
But 1/2 the value is in the equity. The rest means nothing because all that is money owed to the lender. I’m not interested in what’s owed to the lender. That’s not equity and it’s not money I’ll ever see. The lender gets that! The only thing I’ll ever see is the equity! That’s all I’m interested in.
So if I’m buying in for 50% interest, sure, that means I own half the house, but the ONLY value there is the value of any EQUITY! So unless enough equity is there, I’m not going to be interested in owning half the property. Who wants half a property that has little to know equity? Especially if I’m having to invest $15k into it!
To ME, purchased interest relates to the equity only as far as I’m concerned. Sure, I own half the encumbered part as well, but I can’t spend any of that! I can’t get anything from that if we sold the property. I can only get half of any equity when all the smoke clears! So that’s all I’m interested in if I’m buying half the interest. The equity only!