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In the E-book, How to build a fortune and avoid risk using power options, page 16, Jack says the buyer proposes to the seller that he?ll ?buy an option to purchase the property at a price of $75,000 over the mortgage at the end of that time, or whenever the owner moves out, and the buyer will take title subject to the then existing loan balance. The $75,000 will be payable at $1000 per month direct reduction including interest at 10% for 75 more months following exercise of the option.”
How do I think about the 10%? Is it on top of the $75,000, or included within the $75,000?
What is its purpose? Allow the buyer to take an interest deduction?
Help!
John
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