30 Year Amortization In 2?
I’m looking at fourplex that is priced at $145k. The owner will finance with $15k down, 2-year call, 8.5% 30 years amortized. I put that into an amortization calculator and it looked like the payoff for the original loan of $130,000 would be $359,852. Am I correct in the way I am looking at this? If so, this property would never appraise for anywhere near that amount when the 2 year call ended, so why would anyone do this? I feel like I must be missing something, or this person might be intentionally trying to trap someone inexperienced.
@Patrick Torres I don't think you understand how a financial calculator works. 130k @8.5% 30 year amortization and call on month 25 is $127854.27. Print the amortization schedule. and look at month 25.
@Tim Herman
I did not understand how the draw worked, thank you Tim.
Your missing the fact that your tenants are making all the payments for you, so all you are spending is the down payment