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Subject:  Re: GA Deal I'm working... Date:  2/24/2006  1:38 AM
Author:  jodynroy100 Number:  7663 of 14302

I am allowing her to stay AS AN OWNER instead of a renter, at LOWER payments than she'd get with her credit, and LESS down payment than she'd be allowed with her credit.

IN RETURN, she's providing me the reward for my risk in some amount of the FUTURE (non-guaranteed) appreciation equity of the home. We are COUNTING on her "down payment" and her "financing profits" to come from some future BUYER.

Make more sense now?

My first question when I started to try to decipher this thread (which is getting waaay too complicated for 1:30 a.m.) is:
How did you end up with a deal in Georgia, as far away from Washington as you can get? and what part of Georgia is it?
Atlanta has seen significant appreciation in recent years, so if it's in a decent part of the city (and at that price, I have to wonder) she might see that she has a pretty good chance of gaining equity in a few years - maybe. The feeling in Atlanta is that prices might flatten out, but they will not go down any time soon.
BUT, if the real value of the house is $150K tops and she's accepting a price of $160K, and knows it will take her FOREVER to break even on equity, does she even realize that if she needs to sell one day that the 7% (standard in Atlanta) RE commission will also come into play, unless she short sells to an investor, in which case she defaults to you and possibly the mortgage co.?
For you, I see no risk. Even if you have to pay $125K for the house, you'll have roughly $12-15K profit immediately ($134,5 from the lender, plus the broker commission plus her $2500 earnest money) and as much as $35,000 more than that and the $125/mo income as long as she stays in that house.
She might be willing to take on the risk of a $160K purchase price, but she'll be so upside down for so long, it really does seem like she's doing what Georgians are becoming known for nationally - stretching themselves to the limit till there's no breathing room, and it will take on ly a slip for her to fall.
It sounds like a wonderful deal, and we'd all like to find something similar, but IMO, you could price it AT market, instead of above market, and everyone - ESPECIALLY you, will still be a winner.
Yes, you've made a deal that "works" for everyone, but especially you, and I'm sure she's feeling like this is her "only chance" at homeownership so she'll accept any terms you offer.
I hope it works out for everyone, but if YOU manage to get a break on the price, I hope you'll consider giving her one.
good luck
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