The "Short Sale"
Some lenders are willing to accept less than the full payment of their principal. This can be a good thing for all concerned given
important assumptions
. Below you may enter variables that recast the occupant's payments to reflect rental value and income property operations. The occupant is provided an option price at a later date. The option exercise comes with a normal down payment the occupant saves in a sinking fund prior to exercise.
Enter current balance of debt:
Enter the discount the lender will grant (as a decimal value between 0 and 1):
Enter the fair market rent on the unit:
Enter the expense ratio (as a decimal value between 0 and 1):
Enter years prior to option exercise:
Enter a safe rate of interest for indexing rent and sinking fund accumulation (as a decimal value between 0 and 1):
Enter investor required yield (as a decimal value between 0 and 1):