All Forum Posts by: Samantha Soto

@Kurt K.  Thanks!  That's article pretty much summed up what I was asking.  Didn't mean to stir up the political debate pot...but I should have known better.  

Sale Price: 45k

5k downpayment

Terms: Amortized over 30, payments over 5 years with a balloon at the end.

Interest: 8%

Rent: $750/month

The upside is that it's a seller financing deal. The pros being that we can buy the property for only $5k down. Also the property has a good price to rent ratio. It is turnkey and no repairs are required. It appraised for $48k in May 2016 and I have seen the appraisal. The downside is that obviously it's higher interest rate due to the seller financing.  Also, at these terms, our cashflow sucks.

Please help me weigh the pros and cons of this deal.  Much appreciated!

I'm learning so much just from analyzing this deal!  @Kathy Henley I actually made a spreadsheet tonight laying out different terms.  That was great advice because the spreadsheet was incredibly helpful.  @Aaron Mazzrillo I hadn't considered going longer than 5 years but I will run some calculations to see how that would play out for our numbers.  Thanks for the tips!

Just wanted to make sure I wouldn't have to pay the full interest on a 30 year loan in the balloon!

http://www.timevalue.com/products/tcalc-financial-...

As soon as I posted I found a good calculator.  I wanted to post it in case others have the same question.  

Would still appreciate any and all advice re being a buyer in a SF deal!

Along those same lines David, I was wondering if it is worthwhile to wait, since the market seems high currently to see if prices drop drastically.  Like if a property is worth 100k today and in 6 months it's only worth 70k, I will kick myself for buying at the top of the market.  Although I guess there is nothing like a mistake to buy some good education.  

I'm starting to learn about seller financing in the hope of doing a deal soon.  Let's say the terms are that the loan amount is amortized over 30 years, but the length of the loan is five years with a balloon at the end.  Let's just say the loan is 100k and there is a 10% interest rate.  Obviously during the 5 years payments are being made to the seller the interest is being paid on those payments.  What about the balloon?  How does the interest work when it comes to the balloon?  I am terrible at math and am having a hard time conceptualizing this.  Also, not finding any helpful calculators online to let me figure this out easily.  

Anyone have any tips or advice for a buyer utilizing seller financing?  

I am reading headlines about the market plunging worldwide due to the likelihood of a Trump win.  What could this mean for real estate?  Is anyone holding off on buying until things settle down a bit?  Any reason to be spooked right now?  

Awesome that you are familiar with the area and have good people on the ground.  We are buying in Huntsville, AL currently.  We didn't know anything about the market and had to start from scratch, but it was a great learning experience and gave us confidence to eventually replicate the process in other areas.