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Updated over 7 years ago,

User Stats

160
Posts
19
Votes
Rob Scarborough
  • Investor
  • Smithville, MO
19
Votes |
160
Posts

Convoluted Math Help?

Rob Scarborough
  • Investor
  • Smithville, MO
Posted

I believe I need some help with my math.  Here is the situation:

I have a property that I have purchased and rehabbed.  I'm all-in at about $90k (I ran into contractor issues that ran the rehab higher than anticipated).  The property appraised for $100k a few months ago and I owe $80k on a bank loan.  

Here is where I need help.  I have a partner in other properties that expressed interest in this property.  The math that I came up with is the property appraised for $100k.  If he wants to be a 50/50 partner in the property, he would pay me $50k.  I would quit-claim the property from my company's name to "our" company's name.  At the same time, I would pay down the existing mortgage to $68k for better cash flow and refinance the property into our company's name as well (all of which has been approved with our bank, title company and CPA).  The by-laws of our company state we are 50/50 partners on everything, including debts.

He has different math: His concern is a $50k investment for $16k equity is a gap of $34k on his side. That would imply a $68k total gap over appraisal at $100k at 50/50 ownership.

To be honest, I'm not sure who's math is correct.  Help me BP! :-)

Thanks in advance!

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