Posted by brandoncbsre on May 14, 2011 at 18:00:08:
Why not get a discount on the not now and then renegotiate with different more profitable terms with the payor?
Short balloons - asking for problems? - Posted by Lynn (FL)
Posted by Lynn (FL) on January 29, 2011 at 14:12:38:
I have a note seller with notes on 2 different properties. He set these up as Balloon Payment only, 18% interest rate, due in one year. One is a SW mobile home with land, and the other is 4 vacant city lots. The seller admitted that there’s a good chance the payor will default on one or both of the notes, when the payments come due.
Should I even fool with these? If so, at what kind of discount and what headaches should I be prepared to have?
Thanks,
Lynn (FL)
Re: Short balloons - asking for problems? - Posted by Michael(KCMO)
Posted by Michael(KCMO) on March 10, 2011 at 19:36:09:
Assuming the Payors will be unable to make the balloon pmt, but would still like to keep the property, could you renegotiate the terms with the Payors and then buy from the seller based on those terms?
Just a quick thought.
Michael(KCMO)
It depends… - Posted by Rick the Probate Guy
Posted by Rick the Probate Guy on January 31, 2011 at 17:54:51:
Don’t half-baked responses like mine just drive you nuts? I’m betting they do.
The reason I’m posting this at all is that your propective notes are not necessarily bad deals, per se.
That you recognize there’s a good chance that the payors can’t pay the balloons, resulting in defaults and likely your ownership of the asset(s) is important to recognize.
What you don’t state are what YOUR investment objectives are. Does that include a desire to deal with foreclosures, repossesions, posession, management, renovation and resale?
There’s nothing wrong with that strategy IF that interests you and it meets your objectives.
On the other hand, if you are new (or a seasoned pro) who just doesn’t want to mess with this part, see it for what it is and decide if that;s appealing to you. Maybe you just want to go thru the experience for the education. Nothing wrong with that!
My guess is that you are attracted to the prospects of making 18% and haven’t really determined what the upside, the downside and the time and expenditures that are required to make a profit.
That’s because most people who look at such deals haven’t really thought thru the exit plan.
Now, if you’ve decided that you haven’t really asked these questions before and don’t like your asnswers, you can always buy me a cup of Starucks coffee for $3.50(?) and thank me for the many thousands I’ve saved you.
Re: It depends… - Posted by Lynn (FL)
Posted by Lynn (FL) on January 31, 2011 at 21:28:09:
Rick,
Thanks for great information. The check is in the mail. LOL
Seriously, after further research, if I have to foreclose, the deal is thin. Unless the note seller will take a huge discount, I think I’m going to pass.
Lynn (FL)