Calculating monthly payments - Posted by Evelyn

Posted by Mr Donald (NORVA) on October 21, 1998 at 17:29:49:


Calculator - BA-35 Solar. $25 at your favourite Office Supply store.

As for this deal, to make it a reality, you’ve got to figure out the Seller’s motivation. How much CASH do they really want or need? What is their current financing? Will they hold a 2nd trust?

Mr Donald

Calculating monthly payments - Posted by Evelyn

Posted by Evelyn on October 20, 1998 at 17:11:10:


I have found a home which has 4 units. The owners are in their 70’s and just cannot manage the property anymore. They are asking 239,900.00 and are willing to finance over a period of up to 30 years with a fixed interest rate of 8.00%.

I believe, (I am a novice at this) that I have been calculating all wrong. What would be the monthly payments if I offered their asking price and gave them 16,000.00 down?

I guess it doesn’t make sense to us that people would pay so much in interest over a period of time.

Please help.

Signed a Novice

Re: Calculating monthly payments - Posted by Evelyn

Posted by Evelyn on October 21, 1998 at 16:46:23:

First, let me thank everyone who answered my message so quickly. I really appreciate your assistance.

I am really interested in this property, but I do not want to get into something with payments which may become a problem one day. I can afford it, but who knows in the future what may happen.

Again the property is being offered at 239,900.00 and the owners want to finance at 8 %. I was wondering if I split the loan up, let’s say pay for 125,000.00 within the next 10 years and then pay the remainder of the balance (balloon payment?) at the end of that term.

Basically, does anyone have any ideas on making this opportunity come to reality.

Here are some basic facts on the property:

It has 2 units in the main house, 1 of which we would use. 2 bedrooms in the attic that are renting on a weekly basis. And a garage apartment. In total the property has an income of 2015.00 a month, counting the “rent” that we would pay. The total of taxes, water fees, etc. comes out to be approximately to 1050.00 a month.

The owners want and appear to need a down payment. I am only able to come up with 10,000.00. I believe given the right proposal they may accept. They have had this property for over 3 years on the market, on and off. They go to Florida in the winter and take it off at that point.

The property is in great shape, woodwork untouched. It needs some updating in paint, but nothing major. It is a solid, brick house. It’s a great neighborhood. In my opinion they have not been able to sell due to the fact that for starters the price is a problem. Most people looking to invest in property worth that much do not want a house that has been split into units. (Use to be a mansion). Also, the fact that these owners do not want to have the house bought out and out due to them having to pay interest on that amount. So they definetly want to finance.

I know where there is a will there will be a way. I just think that this would be a great investment and an opportunity to get a house that we would not normally be able to get.

Please help with any suggestions you may have to help me. I’ve been reading Carlton Sheets and I’m very inspired that this will happen.

Balloon payment, lease to own?

Any information you may have is greatly appreciated. And thank you for such prompt answers.


Re: Calculating monthly payments - Posted by Brandi (TX)

Posted by Brandi (TX) on October 21, 1998 at 24:25:26:

A great investment would be a “financial calculator”. They work wonders and are WELL worth the 30-40 dollars you will spend. I have a “Texas Instruments BAII PLUS”. Very easy to use. Any way it shows your payments will be $1642.90/mo.


Re: Calculating monthly payments - Posted by John (MA)

Posted by John (MA) on October 20, 1998 at 20:42:11:

Evelyn, you may also want to look at some sites on
the web; has some useful info and
calculators…Good Luck
John (MA)

Re: Calculating monthly payments - Posted by Mr Donald (NORVA)

Posted by Mr Donald (NORVA) on October 20, 1998 at 18:17:45:


Power tip of the day: Find a Staples, Office Depot or Office Max store near you. Look in the calculator aisle for the Texas Instruments BA-35 Solar.

This little machine will do wonders for simplifying your calculations on the fly. For your problem:

N=360 months
I=8.000% per annum (.666667% per month)

Monthly Payment is calculated as $1642.90 (P & I). How much are the rents and what are your expenses on this one?

Your interest over 30 years totals $367.543.60. What are your long term goals for this property?

Mr Donald.