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How much above teh interest and cost of your financing are they paying in rent? How much did you put into the house between purchase and remodel? Do you want to sell now at a fixed price or sell later once they obtain the financing?
They are paying enough to cover payments on "my" mortgage (which includes principal interest escrow for tax & homeowners insurance and PMI premium). Purchase price was $141000. 10% 14,100 down, closing costs were around $3,000.
We also spent $500 on a home warranty, $400 on appraisal and $375 on an inspection. Remodel and repairs have been around $8000. I put all of these funds in.
So we are "financing" the additional costs, around $25,000 at 5% for 10+/- years. Payment for that is $250/month.
They can't buy it now, but they want a fixed price.
At least it is "fixed" in that we don't plan to make it based on market value at the time of sale.
Sorry, forgot to say the mortgage payment is $911. They are paying a total of $1160.00 per month in "rent".
BAsically, they are paying your cost of carrying the house and the financing of the money you have put in. In light of the fact that you are not making any money on your outlay, I suggest that the arrangement be a lease with an option to buy. Let it run for three years before they have to excersie the option. The purchase price would be the price you originally paid plus your investment. What this means is that you will have accrued a small amount in principal reduction. In another three years both their situation should improve and the value of the house should increase. If you fix the excercise price at the price you paid, they will end up with a good deal and you will get a few dollars based on the reduction in the pricnipal amount of the loan.
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They want the principal reduction to accrue to their benefit.
I get the Tax benefit in the mean time, plus the interest on the "personal" loan.