First attempt at selling a property using a wrap mortgage
I'd love to get some feedback on the deal I'm currently trying to put together.
I recently purchased a property for $70,000. I immediately listed it for sale at $99,900. I received an offer 5 days after I purchased it from a buyer requesting I owner finance it. He has a $25,000 down payment. I countered their offer with the below terms which should net after all costs to close about $94,000.
----"$99,900 purchase price
----$25,000 down payment from buyer
----$1,000 buyer closing costs paid
----seller Financed mortgage of $75,000 at 7% interest on a 10 or 15 year am (whichever buyer would prefer).
----Buyer would pay for insurance (with me as co-insured), pay for annual taxes, and make any repairs or complete any maintenance as needed. Basically we would treat this as if it was a traditional financed deal."
I have a 50/50 partner. Our net on this deal would be approximately $23,500 total or $11,750 each. Partner has no interest in the owner carry but is happy to make 50% of net on an extremely quick turn. We paid cash when purchased.
Podcast #70 was awesome and provided me the push I needed to try an owner finance deal. So, I would take my $11,750 profit and keep approx $5,000. I'd then take $5,000 and use to pay down $70,000 initial purchase and finance $65,000 at 4.5% interest, using the same amortization as buyer selected. The remaining $1,750 used for closing costs on my loan. It should net me about a $175 monthly residual. I'd close both mortgages on the same day. My banker and buyer are both aware of each other's mortgages.
Am I missing anything here? Would you keep entire $10,000 and finance $70,000 instead? Again, I'd love to get some feedback as I don't want to do anything out of line.
Thanks in advance.