Ps. Cal me directly if you need help locating a property in the Long Beach area.
All the best,
Coldwell Banker Star Realty
BRE Lic #01456982
So in order for you to recoupe your initial $36,000 cash pay out, it would take almost 80 years at $450 per year divided into $36,000.
Now if you were to take that $36,000 and buy a condo for lets say $70,000...You could generate a positive cash flow between $350-$400 per month which equals to $4,200 per year($350 x 12), plus you would be able to depreciate the property and write off the interest on the loan (in Long Beach we have such properties on the market, in your area I am not sure).
I hope this helps you out on seeing a different perspective, but always remember you are in control and make the final decision. Good luck and have a fun weekend which is just around the corner.
I had buyers opt to do this on a short sale I closed not that long ago. I had to explain in the MLS that the buyer paid the commission, had they not paid commission then the MLS sale price would have been $810K.
If you end up paying the commission & this is a public sale in the MLS, please make sure the listing agent notes in the MLS that you did this, it will help appraisers determine the correct values when comparing to 99% of the other sold listings where the seller paid the Realtor commission.
As far as how you want to use or invest any of your cash, I think that's really up to you; and from what I read, you are very aware of what your plan is investment wise.
The only real question you have is whether you can pay the realtor's fee at closing instead of the seller. The answer, as we can see below, is Yes, as long as you work that out with the seller and that it is done through Escrow and above board.
im really trying to upgrade while limiting my tax liability.
You didn't mention a 6% seller concession. Therefore, it is impossible for anyone to presume otherwise. Although (listen to me), it makes no difference. I previously mention lender's criteria. What part didn't you understand about LTV? You certainly can do as you wish. I did my best to give you constructive advice. If it fell upon deaf ears (eyes), I'm not responsible for that. .... Best wishes in your decision making & Happy funding, Rudi
Im not sure if you understood that i would ask the seller to reduce the agreed price by 6% then use that 6% to pay the realtors from my pocket. then i save the prop tax and since i will be putting 50% down it makes no difference to the loan amount or rate. as for the investing the 36k i cant find a stable 4.5% anywhere that would offset the interest paid on a loan since my investments would be after tax it would offset any benefit i get from the interest paid
Here's why. The lender is going to base their Loan-to-Value on the Purchase Price or the Appraised Value. Whichever is Lower.
$600,000 x 20% = $120,000
$564,000 x 20% = $112,800 + $36,000 = $148,800
$36,000 - $7,200 = $28,800
With the lower purchase price you'll save about $415 a year in property tax.
(Not computing your mortgage interest savings on the lower amount @ 4.375% on a 30 year fixed rate amortization)
$28,800/$415 = 69.4 years to break even? From this, deduct the interest and it still won't be beneficial, will it?
...... Happy funding, Rudi