All Forum Posts by: Account Closed

18% is a rich cut to give him before splitting profits. You're basically financing his land cost by contributing it at market value if you don't get paid until the end. I did a similar deal recently and contributed the land in exchange for pro rata profit split based on cash builder put in for build costs.

Based on these questions, strongly advise that you start with a simpler transaction. This is about as complicated as it gets. Without knowing the specific law in your state, the likely result is that if you buy the second, you will own the property with the first mortgage still in place. It will be in default due to the change in ownership, if not also because the prior owner likely wasn't paying the first note. That means you need $350k in cash (in addition to the $50k to buy the second) to take out the first mortgage - otherwise, they will foreclose their senior lien and you will be out your $50k. Be glad you asked this question and immediately run away from this "deal." 

Not legal advice.

@Azeez K. quite a response. I'm in. 

@Manny Gonzalez I do regularly handle this type of partnership/real estate litigation - I will send you a private message to get additional information and walk you through the various options. 

@Rick Baggenstoss thanks

Who is the seller? If it's an investor, I'd stay away. It is a red flag that it is being marketed to you as an investment opportunity with "only paint" left to do. If it was that easy, the owner would finish the job himself and max out the equity in a retail sale. Also, I agree with 

@Account Closed on pricing. Must be really rough area or really far out in the burbs. 

Got it, so more of an income play.  

How do you make money on this deal after repairs and commissions with only $13k in equity based on your projected ARV?

@Rick Baggenstoss was thinking about doing this...might want to shoot him a message and see if he had any luck. Given how the City of Atlanta normally operates, I imagine it is not an easy process if you can get anyone to even respond. 

Interesting, first I've seen of this. 

@Jimmy Day It would, in that the area is definitely in much higher demand (which will likely stay the case) than what I usually consider "downtown," so I wouldn't lean toward selling just because of location. But I might still try to trade into something with higher cash flow.