This Underwriting Income Calculation Worksheet should be placed on the property that is being offered for sale. By simply explaining to potential buyers the purpose of the worksheet, they can use it to guide them through the entire process of the negotiation process.
In case the property that is being offered for sale is going to be a rental property, then the Underwriting Income Calculation Worksheet should state that the maximum and minimum payments that a renter will make would be a consideration of the value of the property. The renter would have to agree to the terms stated in the income worksheet and accept the additional payment agreed upon by the seller. This worksheet helps in determining the potential income from the rent from the renters.
If the property that is being offered for sale is going to be used as a business, then the Underwriting Income Calculation Worksheet states that the business would have to produce a return on investment. In order to calculate the return on investment, the income and expenses of the business should be calculated. The returns on investment would have to be multiplied by the price of the property to get the profit on the business venture. In the case of a rent to own property, this calculation can be done after the fact.
Once the returns on investment are determined, then the amount of property that is being offered for sale can be compared to the calculated return on investment. It is recommended that if the returns on investment is too high, then the sales price of the property can be adjusted to lower that amount. This will not only help bring down the price, but it would also add to the net proceeds of the sale.
Also, the property could be sold to another investor, who might be interested in the property, and this could be determined from the net proceeds of the sale. The net proceeds should be considered when determining whether or not the property can be sold or resold, because there is no guarantee that it will sell, considering the relatively low price of the property.
The net proceeds are also calculated from the expenses, or gross profits. In order to calculate the net proceeds of the sale, expenses must be deducted from the sale proceeds. Once the cost of the property and expenses have been subtracted from the sale proceeds, it can be determined the value of the property.
As a result of all these calculations, it can be determined the value of the property that is being offered for sale. With this information, the seller can determine the minimum and maximum payment that a renter can make. By simply asking the renter for the difference between the two payments, it can be determined the amount of income that a renter will make on the property.
The Underwriting Income Calculation Worksheet can be found on the internet and can be downloaded by anyone who has even the slightest interest in investing in a business venture. In fact, this can be one of the best tools that any business can use in order to determine how much money it will take to purchase the property that is being offered for sale.
