All Forum Posts by: Devonte Thomas

Sorry to those I may confuse by asking the same type of question as before but I genuinely need some clarity.... I was wondering what the terms mean when a cash-out refinance requires the home owner to at least have 20% equity in the home. Does that mean when the cash is taken out I would need to have a 20% downpayment originally, BEING my 20% equity in the home, or does that mean the house has to have 20% equity left over from the new value of the house if the loan only covers 80%?

I'm not quite sure on how to structure my bank account... currently I have a property account and a cash flow account, to separate the cash flow from the expenses, but should I be opening a business account and within that account have a property account and cash flow account? 

@David M. Yep just wanted to confirm that I could do it that way without running into a major problem later thank you!

@David M. Sorry! I was going to ask you this as a matter of fact but I didn’t wanna bother you considering I asked many questions on the previous one lol

I am currently considering how I would exit a seller financing deal that has a 5 year balloon in the P&S agreement. For example let's say the terms state that the purchase price is $380,000, DP is $19,000 or 5%, Amortization is 30yrs, interest is 4% and seller wants a 5yr balloon. At the end of the 5yrs I would owe a net balance on the property of $326,500. If I were to sell the property at this point when the term is up could I use the cash to pay the investor since he would have a lien on it and if there is profit from the deal keep it?  

@David M. Ok thanks and I was also wondering when a buyer and seller do a VTB does the seller pay for property taxes and insurance separately from the principal and interest?

@Derek Dombeck Hey Derek could you point me out where I went wrong. I multiplied 361,000 by 0.04 then I multiplied that by 5 what should I have done?

I am currently confused on how I would exit a seller financing deal that has a 5 year balloon in the P&S agreement. For example let's say the terms state that the purchase price is $380,000, DP is $19,000, Amortization is 30yrs, interest is 4% and seller wants a 5yr balloon. At the end of the 5yrs I would have paid off a total of $72,200 (not including property tax and insurance) leaving me with a net balance owed on the property of $288,800. If I were to use a cash-out refinance of up to 80% on the property and the property value didn't change so the loan would be $304,000 would the loan be paid to the seller? What happens to the left over amount of money? Would I have to put 20% down since the loan only covers 80% of the assessed value of the home?

I'm currently planing on buying a duplex as a small multifamily investment for rental income and decided on the method of seller financing; however, I don't have any idea of how to make the contract but rather only negotiate the terms. So how would I go about making the terms that the seller and I have negotiated on into a contract and who would I need to make this contract such as lawyers etc?

@John Mocker thank you very much!