Let me explain to you more about real life financing

the house va_landlord is buying is a deeply discounted one being sold by the bank. It probably is already 70% off from the market value, how much will it drop?

If the credit gives him the loan and suppose that he becomes default, the creditor will get the house back and sell it for a profit. The risk for this creditor is actually very low.

I agree that the rate va_landlord is proposing is on the low side, his proposal will get more attractive if rate can be raised to 10%. If I have the money I will lend to him. Of course, I need to check the property he is buying, make sure that it's a deal before I will release my loan to him. It's business.

The "risk" you understood is paper risk. You haven't done any real deals like we do, you mostly get your knowledge from reading text book.

所有跟帖： 

• :) at 10% do you think he can make a business out from it? -山高月小- ♂ (477 bytes) () 06/26/2008 postreply 08:26:16

• By the way, I am not saying he will be default. -山高月小- ♂ (272 bytes) () 06/26/2008 postreply 08:39:28

• In a matured legal society, the trust is bound by contract -miat42- ♂ (238 bytes) () 06/26/2008 postreply 09:10:00

• Ha.. you have never done business deal. :):) -山高月小- ♂ (17 bytes) () 06/26/2008 postreply 09:34:04