While listening to one of the myriad of podcasts I follow to learn more about real estate one of the guests mentioned a way to help a spouse be on board. First I want to mention that my wife isn't against doing this but while numbers on a spreadsheet and a bank account are good enough for me I think it would be good for her to see some more tangible good outcomes. This is just my idea, not hers.
So the guest was talking to a friend who had just bought a place for $80k but had a wife that was grumbling. So the guest asked his friend if he would have paid $85k. The friend said yes it would be worth it at that price too. The guest then told his friend to buy it at $85k and take $5k to go on a vacation with his family. That turns the "negative" of bringing on another property to a positive that the family looks forward to. There weren't any details given. This was a side comment.
I've only done one deal but I can't figure out how one would do this. Let's use the numbers listed above. Let's say I negotiate down to $80k which is 70% of assessed value. Wouldn't my bank know that and finance accordingly at $80k. So, how do I get that extra $5k into my pocket? Do I ask for a "credit" from the seller? That seems like it would go badly. i.e. "I just bought this from you at $80k but I'd like you to sell it to me at $85k and then you'll give me the $5k back."
Can someone help me to see how to do this? Are there any negatives besides the obvious higher mortgage payment and less equity. Let's assume the deal still works even at the higher final price of $85k.
@Eric Y. , I recall that conversation in a podcast as well. I don't think he was speaking of an actual $5k as a part of the transaction, but rather that you would have spent another $5k on the deal and have been happy. Therefore take a $5k that was saved on the deal and spend it on a family vacation. IMHO anyway.
@Eric Y. I don't think the intent was to structure an extra $5K into the deal or extract $5K from the deal. It was basically a way to get the family (wife) on board with the idea of investing. So if you have $25K saved (or refinanced $25K out of an existing property), you "spend" $20K for the 25% down on an $80K property and the remaining $5K on a family vacation.
I must have misunderstood the conversation. It was a fast exchange :)
Thank you @Buddy Holmes !
An idea is once you achieve a target goal (whether it's your projected ROI or you've received $5K in rental $), then you can use that money to go on a vacation. During your trip, remind her that this $ came from your real estate investment!
If your spouse is interested in home shows or house design magazines, ask her to pick out the finishes / paint color etc to get her more involved.
Originally posted by @Chris T. :
An idea is once you achieve a target goal (whether it's your projected ROI or you've
Solid advice here Chris. I think I will start to develop a little program like that.