Updated almost 7 years ago on . Most recent reply
Broker Including Principal Reduction
Hey everybody,
A bunch of the OMs I'm getting sent include a principal reduction in the financial analysis. It's factored into the cash-on-cash return and increases it so it makes the returns look much better and the property more attractive in certain ways.
What is this principal reduction?
Are principal reductions typically offered to lendees?
Why do brokers keep including it in their OMs?
Should I factor this into my own underwriting?
Thanks!