Ok, a friend and I are "flipping a house". She had the money to buy the house. I borrowed the money for the renovations. Every month until it sells I am paying a $325 payment on the $15000 loan I have out. 99% of it is interest. So, when the house sells, she will get back her investment, which is the puchase price of the house, the utilities, taxes, and insurance. I will get back all of my expenses for all the renovations. Should that include the interest I am paying every month or not? I believe it should. I HAD to borrow the money for the renovations or the house would have never got "flipped". It was a NECESSARY thing. I believe the interest should be an included expense. What do you think?
2007-11-10 05:30:03 · 5 answers · asked by antonedbone 2 in Business & Finance ➔ Renting & Real Estate
What I would have insisted on was that all profits be equally shared.
She could not have made a profit without your part of the renovations. You could not have made a profit without the property.
Now that you are talking about past tense, work something out between the two of you. My personal idea is that expenses are expenses, and your interest payments are expenses.
This is my help from Washington, DC, United States of America.
2007-11-10 05:42:56 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Without looking at your contract I can only give you my opinion. She should pay about 1/3 of the interest. I would normally say 1/2, BUT you get to write the interest off of your income tax, she doesn't, so 50-50 isn't really 50-50.
2007-11-10 09:53:20 · answer #2 · answered by Landlord 7 · 2⤊ 0⤋
It should have been written into your agreement how profits should be distributed. Of course you should be compensated for your expenses, assuming you see a profit from this house. But what is "right" doesn't really matter, what matters is what your agreement says. If it says that you get $15,000 when the house sells, that is what you get.
2007-11-10 05:51:52 · answer #3 · answered by godged 7 · 0⤊ 0⤋
Does your important different evaluate your interest an cost? Is there a series of allowable costs defined on your contract? i imagine a similar element i assumed on your previous question. interest for the interior most loan is an cost and also you have to be compensated for it. notwithstanding, in spite of your contract says is what's going to be binding.
2016-10-23 23:48:58 · answer #4 · answered by ? 4 · 0⤊ 0⤋
I think you need to refer to your partnership agreement with the other party to see how the profits will be divided. You did draw up a formal agreement, didn't you?
2007-11-10 05:42:52 · answer #5 · answered by Bostonian In MO 7 · 0⤊ 0⤋