How does investor make money?
Investor sells on a Contract for Deed or Lease-Purchase/Option on a 2yr deal. In 2 years the property should be worth about $106K (3% appreciation per year). So sells for $3K down, $800 month, balance due at term = $103K Profit = Upfront $3K – $10 = $2,990; Thru term = $800 – 650 = $150 x 24 = $3.6K; backend = $103K – $90K = $13K TOTAL PROFIT = approx $19.