So the $360,000 30-yr loan @ 5% simple interest would cost you $1,050 PI/month (360,000 / 30 years = 12,000. 12,000 x 1.05 / 12 = 1,050/mo payment - is this math correct?).

Your secondary risk is that you are assigning this deal.

I know with the short sale I did we owed something like $360 ($330 + 30 secondary) and sold for $230 (220 + 10).

Considering doing a few buy / improve / sell deals with an old buddy of mine who's made a living as a RE Agent for 30+ years.I'm an early retiree , have owned commercial RE deals , MFH , SFH for 20+ years.I'm trying to set up a structure that is fair to both parties , and gives us plenty of motivation to do 5-6 SFH buy / improve / sell deals per year in solid neighborhoods.Any comments on the following structure :- Funding partner funds 100% , co-ords legal & admin , proforma & budget , secondary participation in rehab co-ord and finding deals- Selling partner , finds deals , primary rehab , sells deals- Funding Partner earns 1.5% return on equity per month- Selling Partner earns commissions on each end of deal- 50/50 profit participation - Form LLC for holding ( both ) and separate LLC for funding ( me )Is this " reasonable and customary " , " win / win " ???

Most of the programs out there take advantage of people's ignorance about mortgage math and how loans are amortized.

Based on my math, your payments are about $250 to $300 and I'm guessing taxes and insurance might be another $300 or $400 (assuming the assessments are still pegged to boom prices as most counties here are still at).

Being accurate on this is essential inorder to make proper offers.Now that you know that, using proper math is also essential.

There is no magic math.

btw marc i applaud you for asking the question...when i first came to BP i didn't know the first thing about business or math formulas..just knew how to find a good deal and fix it up...look forward to your contributions as you continue to learn :)

Mortgages on properties occupied by the borrower as a primary or secondary residence tend to have lower credit risk than mortgages on investment properties."