Bullet Repayment

"Say hello to my little friendddd." Uh, yeah. Different repayment of bullets.

Bullet repayment is a loan repayment structure whereby the entirety of the principal is paid at the end of the loan’s life.

Kyle graduated college confident that his social media app, SpaceGram (SG), would be the next big thing. But he also knew that his monthly cash flow stream would be hamstrung until he was able to sell SG to a high-tech Silicon Valley company.

He also knew that he couldn’t live in his parent’s basement in Kalamazoo, MI if he wanted to have access to the movers and shakers in Palo Alto, CA.

Luckily, he was able to find a 400-square-foot house in Mountain View, CA, selling for just $2.5 million with a bullet repayment available on the mortgage.

Knowing that SG would sell for 20 times as much, he gladly signed the mortgage and will worry about the $2.5 million if and when it actually comes due.