Want to be a landlord? If you answered “yes” then my next questions is …Why? Why deal with collecting rents and tenant issues. Why let property taxes, insurance, management fees and repair costs cut into your money?
Here’s another option that some of my Investors have been doing. Instead of becoming Landlords they are becoming Lenders. Owner financing is making a come back. It’s difficult for folks to get mortgages right now and offering financing can make the property worth more money.
For example: We can find you really good rental properties right now for $90,000 to $100,000. These homes would normally rent for about $1,000 a month. After expenses your NET is roughly $600 a month.
Instead…offer the property for sale at $120,000 with $25,000 down, no qualifying mortgage of $95,000 @ 8.75 amortized over 30 years with a 5 year balloon payment.
You would receive roughly $16,000 at closing (25K minus selling expenses including commission). Monthly payments of $747 for 60 months. The buyer would be responsible for all taxes, insurance and repairs. You would have zero expenses.
After 5 years the Buyers would have a balloon payment to you of $91,000. You would have already received $45,000 in payments. Therefore your total money received would be:
At closing $ 16,000
Payments $ 45,000
Balloon $ 91,000
Sub total $ 152,000
COST(BASIS) ( 100,000)
GAIN $ 52,000***
52% return over 5 years. Or a little over 10% per year. It works out better than a rental with less hassle. Of course you would miss out on any future appreciation (if any) unless of course the buyer defaulted and you got the property back through foreclosure (not a bad deal). So as you can see this can be a very good way to go. If you’re interested….just complete this form and we’ll get right back with you.
***Please check with your accountant about tax issues.
Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
Want to find out more? www.CentralFloridaShortSales.com
***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.
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