If you settle for less than you owe, you have to pay income taxes on the amount that was forgiven.

I invested in 2 loan deals with RealtyMogul, one had some principal returned and the other should return principal soon as the property was put on the market last month I believe.

I owe $170K and have been paying extra principal each month.

The ARV is 60k Owes 40k remainingIs there any way to make this out of some positive earnings through Owner financing due to not having enough equity to wholesale?

I will owe them money correct?

In the end I will end up reducing my principal and interest.

As long as title will receive that addendum, and it states the terms, title will not risk their business on 4k....Just make sure the addendum states the correct terms...I basically do the same thing, i just dont call it an addendum, i make a simple two line contract with my buyer stating they owe me xxx aount of dollars at closing for bringing them this deal...I hand everything over to title and let them handle business..And Congrates on your 1st deal....

I suggest everyone look up "Equity Stripping" any lien on any property that is relying on equity to cover the debt owing can get you nailed.

.* The owner owes 22k and is three months in arrears.In livable condition "as is".

The homeowner isn't to sure how much she owes on the property but has estimated it at 60 to 70k.