All Forum Posts by: Paul OConnell

I would think a lease would solve this problem, since the contract would be cancelled within 12 months of one of these events occuring.

The answer requires a little calculus.

6%< your return <= 33.5% = do the deal!!!

Keep in mind the basic advantage of leverage. It frees up cash to re-invest in more projects, etc. Many investors will come to a point where they are no longer interested in stockpiling assets, they want to monetize them. With all successful businesses, big and small, you will see a transition from the Growth/Expansion phase to the Mature (hopefully as a cash cow!!) phase.

Are you valuing it at over a million because there was a 2008 sale at $850k and $200k was put into it?

I think there might be a flaw in that logic. Especially considering you have MUCH less than that into it and it seems to sell every 2-3 years. You may be biting off more than you realize.

There is a castle in Kalamazoo, MI which has gone through owners at about the same pace, no one can seem to make it work.

Your profile says you live in GA, does this mean you are moving to PA?

Put her on the payroll and have all of her pay go into a tax deferred retirement plan. ;)

"I have a new question:

Assume the seller has paid the taxes for the whole year, Jan. 1 to Dec. 31. The closing date is Dec. 30. Using a 360-day year, how much in taxes does the buyer have to reimburse the seller?"

It depends on what the buyer and seller agree to.

Loretta: being 63% of something is not the same as being 63% more than something.

Yes I used 2.63 because you have the total that was spent on both Lot 1 (cost = x) and Lot 2 (cost =1.63 times x, aka 63% more than x). Since you have the total you would add those two up and get 1 times x plus 1.63 times x which equals 2.63 times x.

For #2 Am I reading it right that Loretta is having the Seller reimburse the buyer for the time between June 30 and Nov 13? If so, that is wrong. The seller should be reimbursing the buyer for the time between Nov 13 and Dec 31, the time that the buyer has paid for, that the seller will be using.

For number 3: My work is as follows:

$45,674.81=x+1.63x

where x = the cost of Lot 1.
$45,674.81=2.63x

x=$45,674.81/(2.63)= $17,366.85

$45,674.81-$17,366.85 = $28,307.96

1: Buyer $638
Seller $1,016

2: Seller pays buyer $220.58 in cash

3: Lot 1: $17,366.85 Lot 2: $28,307.96

4: Nick: $18,900 Brother: $24,381

Maybe?

If you make sure there is no prepayment penalty, then you could lock in a lower rate in say three years if rates start to creep too high.

Even if there is a prepayment penalty it may make sense if you think rates are going to get that high to pay the penalty.