Free tools / Seller Financing vs Bank
Seller Financing vs Bank
Compare a seller-financed note with a bank loan on the same amount, then check the refi gap: can a stressed refinance pay off the balloon?
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Example inputs, not market dataStarting values are made-up examples to show the math. They are not market data. Replace them with your own figures. Nothing you type leaves your browser.
Results
Updates as you typeHow this works
Loan = price x (1 - down payment %)Monthly payment = loan x r / (1 - (1 + r)^-n), r = rate / 12, n = amortization months (straight-line at 0%)Balloon = loan x (1 + r)^k - payment x ((1 + r)^k - 1) / r, k = months until the balloonStressed NOI = NOI x (1 - haircut %)Max refi loan = present value of (stressed NOI / DSCR / 12) at the refi rate and amortizationRefi gap = balloon - max refi loan. A positive gap is cash you would need to bring.
A low seller rate helps cash flow now, but the balloon is the real risk. Grow NOI enough before the balloon, or negotiate extension options.
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