# Credit Partner

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 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?

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??

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