[Eric Pirozok]

Eric Pirozok

You may want to consider “softening” you criteria for posting…sometimes I feel like I am living in the old “Soviet Union”…I contribute seemingly “helpful” information that eventually is removed by the moderator because it may not be “Jack Miller & Company” product/service friendly:plain:

[Eric Pirozok]

Eric Pirozok

Jack Miller says, “The surest way to become a millionaire with real estate is to borrow a million dollars, buy property, and then pay it off. Even if the property never appreciated, you would have your million dollars.”

Also, the property was obtained via “creative financing”…so far my out of pocket expenses have totaled $500.

Yes, vacancies, maintenance, and repairs will happen and have been accounted for and can be managed with my credit lines and will be easily recovered when the property is sold because the property was obtained at 70% of market value.

Is $100 positive cash flow a bad thing? If so, what is the magic number?

[Eric Pirozok]

Eric Pirozok

Check this out:

Loan Amount: $150,000
Annual Interest Rate: 8%
Loan Period in Years: 30
Scheduled Monthly Payment: $1,100.65
Scheduled Number of Payments: 360
Total Interest Expense: $246,232.87

Rent Schedule for the next 13 years ($100 over mortgage payment plus 5% annual increase):
1 $1,200.65
2 $1,260.68
3 $1,323.71
4 $1,389.90
5 $1,459.39
6 $1,532.36
7 $1,608.98
8 $1,689.43
9 $1,773.90
10 $1,862.60
11 $1,955.73
12 $2,053.51
13 $2,156.19

If I apply every extra dollar to principal I will pay off the mortgage in 13 years or 156 payments and pay only $105,127.30 in interest expense…this is a savings of $141,105.57 in interest expense.

Someone needs to verify the following…this is equivalent to an investment that returns an approximate yield of 12%. Stated another way…if I invest every extra dollar that investment would have to yield approximately 12% to achieve the same/similar results of paying off my mortgage in 13 years:

Yr. Xtra $/mo. Balance at 12%
1 $100 $1,268.25
2 $160.03 $3,450.05
3 $223.07 $6,693.10
4 $289.25 $11,164.71
5 $358.75 $17,054.28
6 $431.72 $24,576.04
7 $508.33 $33,972.12
8 $588.78 $45,516.03
9 $673.26 $59,516.52
10 $761.95 $76,321.94
11 $855.08 $96,325.13
12 $952.87 $119,968.88
13 $1,055.54 $147,752.07

[Eric Pirozok]

Eric Pirozok

How does a “contract for beneficial interest” compare to a “contract for deed”? What are the pros and cons of each instrument? Does it matter if the property and buyer reside in Florida and the seller in Montana?