Morning All,
I wanted to see if anyone can give any inputs on equity splits and this deal in particular.
The potential deal I am working on is this:
Woman owes 125k on the house + another 8 k in lates and misc.fees. House is worth 205ish. I want to take over her mortgage, make all back payments and get the title from her.
After all expenses(realtors commision, mortg. payments,minor repairs,etc.), I expect their to be a profit of around 40-45 k. I want to offer her somewhere between 30-40% of my profit.
Is there anything wrong with my assessment? Anybody see any potential pitfalls with this?
Any advice or input is appreciated
gregg
Hard to say. Not enough information.
Your total into the deal is $133K ($125K + $8K).
Don’t know how much your “minor repairs” are going to cost, nor how much the monthly payments are or how long that you expect to pay them before it sells.
From your numbers posted, you’ll have a gross profit of $55K ($188 - $133) or so. Subtract your expected expense from that to see what you’ve got to work with (my guesstimate would be about $30-35K in actual profit).
I always see pitfalls when dealing with the seller on a property for anything other than a straight sell. For instance, where is this person going to be living during the sell phase of your plan, in this house?
Raj
Thanks for the reply…rehab costs will cost less than 4 k…I am going to give them about 5 k on closing so that they can move out.
I plan to give them another thousand after they leave the house and the key is in my hand.
I am pricing the house 5-10% under market value…so even in Tucsons slower market it should sell in less than 4 months.
gregg