Getting around negative cash flow rental by exchanging with 3rd Party
Posted: Wed May 15, 2013 3:04 pm
Debtor has a house which is $259 ($4,500 - $4,759) cash flow negative.
We think the property is worth $720K. Debtor's daughter is willing to
help. If Debtor gives her daughter 10% of the property in exchange for
daughters obligation to pay 10% of the mortgage, the estate will be
receiving positive cash flow from this property.
The transfer of 10% of the property could be done as an installment sale,
wherein at confirmation title does not transfer, but only an executory
contract is created.
The unsecured creditors win because they get a slice of this positive cash
flow. If this property is abandoned, unsecureds derive no benefit from it.
Please comment.
Alik Segal
Alik.Segal@gmail.com
310-362-6157
California Central District
Debtor has a house which is $259 ($4,500 - $4,759)
cash flow negative.
We think the property is worth $720K. Debtor's daughter is willing to help. If Debtor gives her
daughter 10% of the property in exchange for daughters obligation to pay 10%
of the mortgage, the estate will be receiving positive cash flow from this
property.
The transfer of 10% of the property could be done as an installment sale, wherein at confirmation title does not transfer, but only an executory contract is created.
The unsecured creditors win because they get a slice of this
positive cash flow. If this property is abandoned, unsecureds derive no
benefit from it.
Please comment.-- Alik SegalAlik.Segal@gmail.com310-362-6157California Central District
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