Home owners, this a good deal?

[n8236]

Hello everyone,

I'm looking for some advise as to whether this is a good deal or not. Please bare with me as I'm not good with all the #s.

My dad and uncle went 50/50 on a 4-plex which costed $650k. The mortgage is $2030, property tax + water is $1000, paying $1000 back to equity line and rental income is $4650.

Net per month is 4600-2030-1000-1000=570.

With that, I am now in a position to buy out by uncle's share. However, they are requesting an additional 50k on top of their 75k down payment. We've had the complex for about 2.5 years.

If I pay him 50k (on top of returning his 75k down) for his 2.5 years investment, I calculate a ROI of 17%! Someone please correct me if that's wrong.

Assuming I buy him out this very minute and do finish paying off the equity line with my dad by mid-2016, the 50k I owe him divided by the rental income will me 8.33 years?! Is that good?

 

[MorphingDragon]

Hello everyone,

I'm looking for some advise as to whether this is a good deal or not. Please bare with me as I'm not good with all the #s.

My dad and uncle went 50/50 on a 4-plex which costed $650k. The down payment was $250k (~38.46%) of which $100k is from a equity line. The minimal interest payment for the equity line is $300/month. It's an ARM that expires sometime in mid-2016. The non-equity line downpayment, my dad and uncle each put in 75k. APR on the $400 loan is 4.625%. Mortgage comes out to $2172. Property tax is 1.25% of $650k, which works out to $677 a month. Rental income is $4650.

Net per month is 4650-2172-677-300=1501.

With the 1501 net, they are dumping it all back into paying the 100k equity line. By the time mid-2016 rolls around, they will be about 15-20k short, but will be able to pay it off if the ARM APR is high.

With that, I am now in a position to buy out by uncle's share. However, they are requesting an additional 50k on top of their 75k down payment. We've had the complex for about 2.5 years. Appreciation has been at a minimal of 2-4%.

If I pay him 50k (on top of returning his 75k down) for his 2.5 years investment, I calculate a ROI of 17%! Someone please correct me if that's wrong.

Assuming I buy him out this very minute and do finish paying off the equity line with my dad by mid-2016, the 50k I owe him divided by the rental income will only take me a little under 3 years?! How is that possible?

Go see a property/investment lawyer and get a contract written up. They will sort out the best deal for you.