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Updated over 6 years ago,
42% ROI: What am I missing???
Hey there, so I'm in negotiations with a seller of 3 condos for $105K. These are my numbers below...this is a 10 year balloon at 6% interest amortized over 30 years. At the end of 10 years I'd owe $80K (which I'll pay extra on the principle monthly,so I don't owe anything come balloon time). Is there any reason I shouldn't take this deal?
Also, how do you calculate the reduced interest payment when you make an extra principle payment? I can see this getting very complicated if I make extra monthly principle payments. Are there certain different types of amortization methods that I need to decide on and put int he contract so we are calculating interest payments the same way?
Thanks
Net Income | Offer | Down Payment | Loan Amount | Mortgage | P. Tax | Insur | Maintenance | Management Fee | HOA | Total Fees | # of Units | Income / Unit | Gross / Month | ROI |
$348 | $105,000 | $10,000 | $95,000 | $570 | $125 | $108 | $92 | $185 | $417 | $1,466 | 3 | $615 | $1,845 | 42% |