RECAP: PTP “Partners to Profit”
: Partners/Appraiser to provide current value of home
: Partners provides project costs for entire renovation
: Partners determines sales price
: Partners funds the renovations upfront
: Escrow deducts the original value, rehab costs, and agents’ commissions plus closing costs and splits net profit 50/50 between owner and partners
EXAMPLE:
: Residence is appraised at $ 1 million
: Owner continues paying HOA, taxes, encumbrances and insurance until the close of escrow
: Renovation cost are $150,000 paid upfront by partners
: Renovation takes 90 days
: House is listed For Sale
: Accepted offer is $1,325,000 and escrow takes 45-60 days to close
: Escrow calculates net proceeds as follows: $1,325,000 minus commission and closing costs (5.3% approximate)
: $1,150,000 (appraised value and renovation costs) is deducted from the net balance of $1,254,775 leaving a net profit of $104,775
: The net profit of $104,775 is divided evenly between seller and partners
