Posted by Ronald * Starr on July 08, 2001 at 20:09:42:
I like your idea of approaching her about the vinyl siding trade. That sounds good to me. She should be able to get the work done at a much lower price than you would have to pay. I assume that there would be some kind of guarantee from the manufacturer on the materials? I would be concerned about her company going out of business, leaving you holding the bag if there is some problem down the line.
I worry that you are giving up too much profit with the proposal you posted. Did you have a written agreement about what the payoff amount would be? I would suggest trying to get a little more out of it. Maybe she could put some cash up also. Is she able to pay something more a month than just the first loan payment? You could carry back a second loan. You might find that loan worthless in a couple of years, but it probably could provide some income for a while. If it pays well, you could use it later on – part of a downpayment on a property perhaps. Sell for cash to a note investor, perhaps.
You might also sign some sort of contract that she will provide you one or more other siding jobs at free or at a reduced price. Maybe you would pay just her cost, but they are counted at retail value against the home’s purchase price. You could use these for another property or properties. Or you might be able to trade them to somebody else for something else you want.
I support your desire to get her into the property even though the binding contract(s) expired. That is good business practice, I feel. You might ask her, once she is the owner, to write a letter praising and thanking you. That could come in handy when you are trying to get another buyer signed up. Heck, you sould sit back on a cold winter evening and read it to warm yourself up.
Good Investing*******Ron Starr*****************