[Donn Myers]

Donn Myers

Thank you Prentiss for your quick and insightful reply.

[Donn Myers]

Donn Myers

Jackie:
Like Leopoldo I listened to the re-play of the Prentiss Yates coaching call.

I have the same question as Leopoldo. Could you please explain Prentiss’ example of an option deal with a doctor.

Sounded like: (a) ARV $225K; (b) Prentiss finds the deal and negotiates a $150K all-cash purchase price; (c) Doctor completely funds the $150K purchase; (d) Doctor owns the property 100%; (e) Doctor gets tax benefits of owning the property 100%; (f) Prentiss gets an option to purchase 50% ownership for $75K; (g) Prentiss manages the rental property.

I hope I got the details of the option deal correct. Prentiss stopped there. He did not explain: (a) How the cash flow of the rental is split?; (b) If the doctor receives payments for his $150K cash investment?; (c) Is Prentiss having to bring $75K cash into the deal to buy-into his 50% ownership?

Please explain: (a) The income streams for Prentiss and the doctor?; (b) The different exit(s) for Prentiss and the doctor?; (c) What happens when that ARV of $225K today is $160K three years from now?

Excellent example on how someone with no cash can use options to put a deal together with a private money funding source.

Thank you, Donn