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Updated about 6 years ago on . Most recent reply
Selling a partial to cash out of a deal- feasible or desirable?
Say an investor has enough cash to buy a SFR outright and sell on an owner-financed note, either in a tax advantaged account or after holding for a year. They want to get all their cash out by selling a partial. How would I calculate that? Here are some typical numbers for my area to use for an example:
purchase $50k, sell at $70k, note at 9.9% interest with a 10% down for 150 paymentsThanks for helping me see the variables, to see if this is a viable option.
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Hello @Amanda G., @Rodel Usam has laid out the math for the full note, so for the investor to recover their $50K cash, they would have the $7K downpayment, and then could sell a partial of 89 payments to a second investor assuming they require a 12% yield (with some rounding) for the remaining $43K cash out. At the end of the partial stream of payments to the second investor, the original investor would then receive the final 61 payments.