Investor · Pasadena, CA · Member since 2015 · 50 posts · 29 votes
I am working on a seller financing deal and I am looking for some resources on the math/formula part of it. I need to create a detailed spreadsheet with the full amortization schedule that allows for quite a bit of flexibility - such as increasing the payments every 5 to 10 years, making extra lump sum payments at different times, etc.
I am trying to start from a specific monthly payment and then work around the numbers to get to a point where everyone is happy.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
9y
Well then, you will have negative amortization, the principle balance rising, while making the reduced payments. Expect any seller to have reservations about this, as I would.
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
9y
@Michelle Mapp - That's easy enough to do with the mortgage calculator in the Tools section of the BP website. Bankrate.com also has a great amortization chart calculator.
Investor · Pasadena, CA · Member since 2015 · 50 posts · 29 votes
9y
@Patti Robertson thanks but those both don't allow for the variability I want and to specify the payment. They both work from a perspective of calculating the payment based on the total price and interest. I wanted top back into it the other way based on what I wanted to pay each month. I was able to find the following: http://www.mdmproofing.com/iym/products/loan-amort...
This allowed me to specify payments (i.e. only x amount the first 10 years), adjust payments over time (up payments in x number of years, add in some lump sum payments, etc. This one gave me the flexibility I needed to be able to present my proposal.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
9y
This has nothing to do with your proposal, unless I am missing something......you will have a contract spelling out the term and interest rate, with or without a balloon, then execute a note and mortgage with those terms. You can make extra payments at any time. You should make sure you and the seller use a servicing co. to service the loan. Their software will update the amortization schedule every month. Or, were you trying to lock yourself into a set accelerated schedule up front?
Investor · Pasadena, CA · Member since 2015 · 50 posts · 29 votes
9y
Hi. Yes, we are starting with a payment that is slightly below what would be standard on a 30 year fixed based on the potential purchase price, then we are pre planning scheduled increases in payment, and scheduled lump sum payments. Another way to say this is that regardless of what the final settled interest rate and total price - the first few years have to be at a certain payment in order to make this work.
That is good advice about the servicing company, I had not factored that in but will look into it.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
9y
Well then, you will have negative amortization, the principle balance rising, while making the reduced payments. Expect any seller to have reservations about this, as I would.
Investor · Minneapolis, MN · Member since 2016 · 57 posts · 36 votes
9y
What you are asking for is basically building an amortization schedule that can be changed on a whim. I would bet your best bet is to simply build that in excel.
I would expect you won't find much canned software available for that because there is no market for that. A seller shouldn't enter into a contract in which their cash flow and payment guarantees can change at anytime. It makes tax planning impossible as well.
If I were a seller I wouldn't ever enter into an agreement like that etc.