Convoluted Math Help?
I believe I need some help with my math. Here is the situation:
I have a property that I have purchased and rehabbed. I'm all-in at about $90k (I ran into contractor issues that ran the rehab higher than anticipated). The property appraised for $100k a few months ago and I owe $80k on a bank loan.
Here is where I need help. I have a partner in other properties that expressed interest in this property. The math that I came up with is the property appraised for $100k. If he wants to be a 50/50 partner in the property, he would pay me $50k. I would quit-claim the property from my company's name to "our" company's name. At the same time, I would pay down the existing mortgage to $68k for better cash flow and refinance the property into our company's name as well (all of which has been approved with our bank, title company and CPA). The by-laws of our company state we are 50/50 partners on everything, including debts.
He has different math: His concern is a $50k investment for $16k equity is a gap of $34k on his side. That would imply a $68k total gap over appraisal at $100k at 50/50 ownership.
To be honest, I'm not sure who's math is correct. Help me BP! :-)
Thanks in advance!