- By paying INTEREST on a property, a BUYER is technically buying back the Lender’s ownership interest.
- On top of that the BUYER pays the PRINCIPAL which is the purchase amount agreed, i.e. Buyer's original ownership interest.
- CASH ONLY purchases remove the Lender’s ownership. In this case, the INTEREST not paid by the BUYER becomes the ownership held by the INVESTORS.
For the INVESTORS: Ownership Percentage is the (INTEREST PAID plus TAXES PAID) divided by Total Amount Paid.
TWO OPTIONS WITH The C.R.I.B.
Example: Purchasing a home with a 30-year mortgage, Full Loan
of $100,000 Taxes at 1% yearly, and PMI at 0%.
Total Amount Paid is
the amount BUYER would have paid to the lender (BANK) in order to gain 100% ownership of
property.
if Taxes are paid by Buyer
Principal Paid
|
Interest Rate which Buyer Qualified with Lenders
|
Total Interest Buyer would have Paid, if not for The C.R.I.B.
|
Taxes Paid
|
Total Amount Paid
|
Buyer’s Ownership Percentage
|
Investors' Ownership Percentage
|
100,000
|
0%
|
0
|
30,000
|
$130,000
|
100.00%
|
0%
|
100,000
|
1%
|
$15,790.23
|
30,000
|
$145,790.23
|
89.17%
|
10.83%
|
100,000
|
2%
|
$33,063.01
|
30,000
|
$163,063.01
|
79.72%
|
20.28%
|
100,000
|
3%
|
$51,777.45
|
30,000
|
$181,777.45
|
71.52%
|
28.48%
|
100,000
|
4%
|
$71,869.51
|
30,000
|
$201,869.51
|
64.40%
|
35.60%
|
100,000
|
5%
|
$93,255.78
|
30,000
|
$223,255.78
|
58.23%
|
41.77%
|
if Taxes are paid by Buyer and
C.R.I.B. – 50%-50%
Principal Paid
|
Interest Rate which Buyer Qualified with Lenders
|
Total Interest Buyer would have Paid, if not for The C.R.I.B.
|
Taxes Paid
|
Total Amount Paid
|
Buyer’s Ownership Percentage
|
Investors' Ownership Percentage
|
100,000
|
0%
|
0
|
30,000
|
$130,000
|
88.46%
|
11.54%
|
100,000
|
1%
|
$15,790.23
|
30,000
|
$145,790.23
|
78.88%
|
21.12%
|
100,000
|
2%
|
$33,063.01
|
30,000
|
$163,063.01
|
70.52%
|
29.48%
|
100,000
|
3%
|
$51,777.45
|
30,000
|
$181,777.45
|
63.26%
|
36.74%
|
100,000
|
4%
|
$71,869.51
|
30,000
|
$201,869.51
|
56.97%
|
43.03%
|
100,000
|
5%
|
$93,255.78
|
30,000
|
$223,255.78
|
51.51%
|
48.49%
|