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#1 Non-Performing Note
Market Value: $100,000
Unpaid Balance: $60,000
Note Purchase Price: $9,500
Rehab and Closing Costs: $20,000
Total Investment: $29,500
Given the market conditions and the high rents in the area, we decided to sell the property as a fully loaded rental. This would be the ideal situation for a landlord/investor who did not need the cash flow right away and wanted to deploy “idle cash” from his/her IRA for future accumulation.
Implementation of the Exit Strategy
We loaded the property with a renter paying $1,200 a month and sold it as a “turnkey” rental for $100,000 with 50 percent down and $50,000 seller financing at 5 percent interest for 60 months. After taxes, insurance and property management, the net rent/cash flow is $943 per month.
The Final Numbers
Property Management: $120
Net Cash Flow: $943
After 60 months, the investor will have a free and clear house with all the cash flow going directly to him. For us, we received $50,000 down payment up front and for the next 60 months we have a $943 a month cash flow. Subsequently, we will give a free and clear Deed to the investor who will have a free and clear house and a monthly cash flow of $943 for himself plus creating generational wealth for his/her heirs.
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