All Forum Posts by: Neil Robertson

@Chris Murdien Chris send me the financials, do you have a T12? Whats your exit?

@Jim Stallings

Jim could I just refinance the loan I have with them and pay the seller financing loan off for a discount as long as they agree to a lower payoff?

Have you done this before?

Cool Jim thanks! You are right!

Correct I agree with you on that statement. I LOVE seller financing because of the ease, not having to deal with banks, less closing cost etc....

I feel that this might be another tool in your tool belt as the podcast says to help you make a good deal even better

Wonder if anyone has used this interesting strategy that I was kicking around 

Lets say you get a seller financing deal for 100,000, 30 year amortization, 8 year balloon @ 3% (balloon payment would be 

$81,829.19 after 8 years.)

Lets say after 3 years you offer the seller to payoff the remaining balance but for doing so you ask for a 10,000 or 15,000 discount on the principal you owe, making this an even better deal for you. 

The seller gets their money earlier than they expected and you get a good discount on the property.

Has anyone tried this method? i guess it would really depend on the seller and their situation

I read a forum post a while back but couldn't find it 

any feedback would be awesome! 

thanks guys 

Has long term tenant that has been occupied for 3 years 

C- Class Property Renting for $800 Per Month , SFR Property in decent shape needs minor repairs ( maybe 2-3K) - 60,00K Asking Price

Option 1: 25K Cash offer close within 7 days ( I can do a cash out refinance and pull all the money out) 

Option 2: Seller Finance – Purchase Price 60K- 0 Down Payment, 30 year amortization, 15 Year Balloon ( Balloon Payment $34,685.10) @2% interest ($14,382 interest to be paid over time) 221.77 Payment per Month.

Option 3: Seller Finance- Purchase Price 40K- 5k Down Payment, 30 year amortization, 5 Year Balloon ( Balloon Payment $31,825.47) @ 4% interest ($6,682.00 interest to paid over time) 167.10 Payment Per Month

Option 4: Seller Finance- Purchase Price 30K- 10K Down Payment 30 year amortization, 3 Year Balloon Payment (Balloon Payment $19,176.22) @ 5% interest ($2,934.00 interest paid over time) 107.36 Payment Per Month 

Will cash flow $400-500 with each option per month 

what do you guys think? Is this a good deal structure?

@Wayne Brooks

Yeah I guess he technically could, but why risk it and he gets the sell his property (which is what he wants to do in the first place). He collects mailbox money this way and he doesn't have to do anything. 

Do you suggest I raise the %??? 

So I'm drawing up a Seller Financing offer (I am the buyer) and I'm thinking that seller financing benefits the buyer tremendously when having to pay Depreciation Recapture. The money the buyer makes off of the interest by carrying the note for lets say 5 years will be more than what he has to pay in depreciation recapture (and yes I am aware the have to pay taxes on the interest income)

For Example:

Buyer purchased property for 650,000. Depreciation  claimed is 23,636 per year (650,000 % 27.5) 

So if the buyer holds the property for 7 years he has to pay 41,363 in depreciation recapture ( 23,636 X 7 years = 165,452.00......165,452.00 X 25% recapture rate= 41,363.00 in taxes) 

So if purchase the property for 650,000 (lets say this is his asking price) and offer him a 50,000 down payment w/ 30 year amortization and 5 year balloon @ 4% the buyer would make 114,555 in interest over the 5 years of him carrying the note!!!

This make it VERY worthwhile to the seller to carry the note. He gets what he's asking for the property, he still gets a check every month, he makes money off the deal and basically escapes depreciation recapture. 

Am I looking at all this correctly? Am I missing something? This seems like a great deal for the buyer....

What are your thoughts? Am I calculating this correctly?