NEW: BP Podcast 66: Flips, Apartments, & Protecting Yourself From Professional Tenants with Michael Blank

Hide this

From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1515 topics, 14405 posts — Last Post 04/19/14, 01:28PM

BiggerPockets Exclusive PRO Area

117 topics, 839 posts — Last Post 04/18/14, 05:47AM

New Member Introductions

10892 topics, 85669 posts — Last Post 04/19/14, 12:51PM

Real Estate Success Stories

396 topics, 6158 posts — Last Post 04/19/14, 08:32AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5940 topics, 46809 posts — Last Post 04/19/14, 12:15PM

Renters

643 topics, 5817 posts — Last Post 04/19/14, 09:29AM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

654 topics, 6265 posts — Last Post 04/19/14, 10:16AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3682 topics, 29513 posts — Last Post 04/19/14, 01:38PM

Real Estate Guru, Book & Course Reviews and Discussions

1133 topics, 11562 posts — Last Post 04/19/14, 12:17PM

Ask About A Real Estate Company

740 topics, 7318 posts — Last Post 04/18/14, 11:52AM

Real Estate Investing

Real Estate Strategies

Wholesaling

5603 topics, 43734 posts — Last Post 04/19/14, 12:37PM

Rehabbing and House Flipping

3334 topics, 31003 posts — Last Post 04/19/14, 01:08PM

Real Estate Development & New Home Construction

553 topics, 4684 posts — Last Post 04/19/14, 12:13PM

Innovative Strategies

703 topics, 6027 posts — Last Post 04/18/14, 08:48AM

Tax Liens, Notes, Paper, & Cash Flows Discussion

866 topics, 6678 posts — Last Post 04/19/14, 06:06AM

Rent to Own a.k.a. Lease Purchase, Lease Options

693 topics, 4891 posts — Last Post 04/19/14, 01:13PM

1031 Exchanges

143 topics, 1054 posts — Last Post 04/18/14, 08:41AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1686 topics, 11286 posts — Last Post 04/19/14, 05:56AM

HUD, VA, and Tax Sales

414 topics, 3089 posts — Last Post 04/18/14, 12:05PM

REOs

1214 topics, 10576 posts — Last Post 04/19/14, 11:48AM

Short Sales

1534 topics, 13120 posts — Last Post 04/17/14, 04:44PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7205 topics, 70761 posts — Last Post 04/19/14, 01:31PM

Mobile Homes & Mobile Home Park Investing

638 topics, 5141 posts — Last Post 04/19/14, 09:49AM

Investor Basics

Starting Out

7704 topics, 60470 posts — Last Post 04/19/14, 01:39PM

Investor Psychology

431 topics, 6104 posts — Last Post 04/18/14, 06:08PM

General Real Estate Investing

4718 topics, 37205 posts — Last Post 04/19/14, 01:06PM

Real Estate Investor Marketing

1731 topics, 14094 posts — Last Post 04/19/14, 06:39AM

Commercial Real Estate

Commercial Real Estate Investing Forum

1410 topics, 8986 posts — Last Post 04/19/14, 01:32PM

Multi-Family and Apartment Investing

1109 topics, 9231 posts — Last Post 04/19/14, 01:20PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

642 topics, 4897 posts — Last Post 04/19/14, 11:10AM

Business Basics

Goals, Business Plans & Entities

831 topics, 7562 posts — Last Post 04/18/14, 04:25PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2786 topics, 20010 posts — Last Post 04/19/14, 11:43AM

Property Insurance

309 topics, 2045 posts — Last Post 04/17/14, 07:41PM

Personal Finance Discussion

328 topics, 2731 posts — Last Post 04/18/14, 04:33PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2833 topics, 19699 posts — Last Post 04/19/14, 11:47AM

Creative Real Estate Financing

1209 topics, 8769 posts — Last Post 04/19/14, 06:24AM

Crowdfunding Real Estate

35 topics, 461 posts — Last Post 04/18/14, 05:17PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1210 topics, 7989 posts — Last Post 04/19/14, 08:04AM

Bankers, Lenders, and Mortgage Brokers

441 topics, 1922 posts — Last Post 04/18/14, 09:39AM

Contractors

268 topics, 1678 posts — Last Post 04/19/14, 03:38AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1989 topics, 11611 posts — Last Post 04/19/14, 12:07PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 428 posts — Last Post 04/18/14, 04:22AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15016 topics, 53956 posts — Last Post 04/19/14, 11:54AM

Real Estate Events and Happenings

164 topics, 2514 posts — Last Post 04/19/14, 01:13PM

Off-Topic

Off Topic

Off-Topic

2905 topics, 32411 posts — Last Post 04/19/14, 08:03AM

Housing News & Real Estate Market

914 topics, 8351 posts — Last Post 04/17/14, 08:41AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Credit Partner

2 posts by 2 users

Signup

· Alhambra, California


So I'm working with a broker and it is a 50/50 split. The broker finds a buyer who can't qualify with their credit with enough cash for a down payment and I come in with my credit. The buyer pays a premium of 20% over the current market price for the property.

Here are the numbers:

Buyer found a home for sale that we can buy for $120,000.
I put down 10% (Home path)

In this case buyer puts down 15% down payment instead of a 20% down payment for these Home path homes.

In this case the buyer has a 10% down payment but has agreed to pay the additional 5% down over 24 months.

So the numbers work like this:
We buy for $120,000; our required down payment = $12,000

Buyer buyers from us for $144,000 ($120,000 + 20%)

Buyer down payment = $14,400.

Buyer will pay additional $7,200 over 24 months to accumulate the 15% down payment (and bolster the security of our position)

Our principal and interest payment based on 4% interest rate: $516

Buyer's principal and interest payment on $122,400 @ 7.99% = $897

Buyer's second mtg payment to pay additional 5% down payment for first 24 months: $325

So our net cash-flow for first 24 months = $706

After 24 months = $381 per month

Gross profit based on 5 year hold = $24,000 from mark up and $23,000 from cash-flow = $47,000 profit

What do you guys think?



Commercial Real Estate Broker · Canton, Georgia


I follow your logic but that's a return based on a bunch of IF's happening.

I just do not like those types of structures. The more exotic you get with things the more links in the chain could potential break and fall apart.

Is there not something else you can invest in that is not as complicated and has less risk??


Small_allworldrealtyJoel Owens, All World Realty
E-Mail: [email protected]
Telephone: 678-779-2798
Website: http://www.AWcommercial.com
www.AWcommercial.com 678-779-2798 [email protected]




Sign up