Re: Real Estate Investment Summary

i am only trying to guide you on biz...,, the
comission on the deal is bigger than yhour profit....
the money is availble. ; your call

--- DKIESQ@aol.com wrote:

I have now annotated the summary I originally gave
you and provided
different scenarios based on different assumptions.
Please disregard the summary I
gave you and review the attached instead.

In the summary I gave you, I assumed that I was
contributing money interest
free for a 50% piece of the deal. My partner has
told me that she is willing
to pay as much as 4% for the money, but not more.
She has already
pre-qualified for a loan at a rate of 5.5% and can
get the money for the deposit from
her relatives. It would be far easier for her and
less costly to carry the
deal (obviously), if I fund the purchase price. We
originally conceived the
deal that she would do all the work, I would fund
the purchase price and we
would split the additional funding required. Under
this arrangement we were to
share the deal 50/50. But I take your point about
the risk, even for a
short term, and will therefore require that interest
be paid on the loan. If I
collect the interest, then the numbers are somewhat
more favorable to me.

Of course, if you want the interest, then the
numbers are less favorable to
me than in the summary I provided to you earlier
today.

I would tend to agree that the numbers are not awe
inspiring If I had no
partner the numbers that I provided you could
probably justify the deal.
However, I am not doing any legwork and I did not
have to find the property. I
would not have the time to do this. So a partner is
necessary. With a
partner, obviously, my share of the spoils goes
down.

Moreover, as I point out in the attached revision,
if, as we suspect we can,
we are able to sell the property without a broker,
then the profit figures
are much more favorable. I just did not want to
oversell the deal to you. It
is my first foray into this business and I did not
want to create
unreasonable expectations.

Frankly, at this level of play (flipping single
family homes for under $1MM
one at a time), it is not particularly likely that
high percentage gain,
short term deals are or will be available. I am
comfortable that the property is
being offered to us well below market.
Consequently, even in the worst case
scenario, whatever we spend is likely to be covered
by a resale of the
property. While nothing is risk free, I am not sure
that there is particularly
great downside risk in this deal. Moreover, it will
serve as a test case for
me to determine how reliable my partner is in
performing the necessary legwork.

One other alternative would be for me to fund the
deposit, my partner and I
take a loan out for the rest of the purchase price
and my partner and I split
closing and carrying costs 50/50. Up front exposure
is far more limited,
but closing and carrying costs will increase
substantially as a result of loan
closing costs, mortgage recording fees, escrows and
monthly interest
payments. I will run a summary for this scenario and
get it to you tomorrow.

Jeffrey, I know it's a lot to ask and, believe me, I
completely understand
if the answer is no. You do plenty for me already.

Thanks for looking this over.

Darren

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