halis123456789
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| Vacant Lot Question |
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Let's say I have a vacant lot worth $60,000 and I want to let a contractor build a $200,000 investment property on it. I will invest the value of the lot into the deal for a certain percentage of the income from the finished property and the builder won't have to borrow to purchase the lot.
How can I figure what percentage I should get? Does anyone know some good sources of info for investing vacant land?
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Wed Jan 31, 2007 12:56 am |
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halis123456789
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I guess that is too complicated to get an answer on...
I have a partner.
We buy a $200,000 house.
I put $50,000 (25%) down on it.
My partner lives there and makes the payments.
How do we split up the profit when we go to sell the house?
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Sun Feb 04, 2007 9:38 pm |
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Bid-Palace
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Coaster,
Good Point.. I think there has to be some kind of input/output ratio negotiation between the partner's. There may be things in the past the effect the deal, in other words, your partner may have stuck his head out for you or got you a sweet deal. It's always good that there is that understanding before a deal goes down. Sometimes, everybody doesn't get what their supposed to at the end but hopefully it all balances out.
Take Care
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Mon Feb 05, 2007 3:45 am |
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halis123456789
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Figuring up the amounts invested at the sale would be one way to do it. As I would be putting up the down payment (25%) I am risking my capital up-front, my partner pays everything thereafter.
Is it reasonable for me to negotiate 30% of the house up-front to protect my investment?
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Mon Feb 12, 2007 2:13 pm |
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halis123456789
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Well, my partner would be responsible for renting the house to acceptable tenants. His benefit will be profiting from appreciation on 70% of the house without putting any money down. Also, if he can rent the thing out, his actual cash outlay will be substantially less (of course I would expect 30% of the rent.)
If you think about it in this context though, it's not a bad deal for him, because he can profit from the equity built by the rentors, as well as the majority of the appreciation, without investing a substantial amount.
Is this now sounding more reasonable for my partner?
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Mon Feb 12, 2007 3:35 pm |
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