Hello, I'm thinking about including a full standby seller note as part of a deal structure and I wanted to make sure I'm understanding the process correctly.
Example (numbers are completely made up, don't read into them too literally)
-$1M purchase price
-$100K in closing costs
-$100K in cash reserves
-10% full standby note.
-5% down payment (allowed since full standby note helps the loan get above 10% equity injection)
In this example, I'm guessing it would be structured as:
-$1M - $100K (seller note) = $900K
-$900K + $100K in closing costs + $100K in cash reserve = $1.1M
-5% down payment on $1.1M = $55,000.
Am I applying the down payment on the correct amount? Is that the correct way to calculate down payment when full standby is involved?
Full Standby Example/Deal Structure
by a searcher from George Washington University
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