Your suggestions for the best way to sell this dog - Posted by Ben (FL)

Posted by B.L.Renfrow on October 24, 2000 at 17:35:18:

First, as far as the guy having $10k, there’s nothing that says you can’t make money after filing BK, so unless he hid assets from the court back when he filed, there’s nothing untoward about that.

I’d check the guy out…find out why he was in BK and if his explanation is reasonable and verifiable, like catastrophic illness, failed business, temporary unemployment, divorce or the like, he might not be a bad risk. Also, has he established any other credit since filing? Does he have verifiable income?

Plus, the vast majority of people who file Chapter 13 never complete the payout, so if he’s that far into it, it’s a pretty good bet he’ll complete the plan.

FHA will loan to people in Chapter 13 if they have successfully completed a certain percentage of the repayment period…never can remember if it’s 60% or 75%. If it’s 60, he’s there now; if it’s 75, he’s got 4.5 months to go. So getting a new FHA loan may well be an option.

If you’d prefer to owner-finance, why not sell on a land contract? If he’s willing to put $10k down, might be tough to convince him to only L/O from you. You could always include a 2 or 3 year balloon if you want.

Extrapolating some figures from what you posted, I guess you bought the house for $72k. You said you used a bank loan…if it was a 90% NOO loan, that means you borrowed $64,800 and put $7200 down. So if you sell to the guy for $77k and he puts $10k down his principal balance would be only about $2k over your loan balance.

So, unless I’m missing something, your back end and monthly cash flow would be pretty much a wash. Your profit would be a fairly measley $2800 on the front end, and a very minimal profit on the back end, less any closing costs you end up paying.

Doesn’t sound like a great deal by any means…but guess it would beat holding onto a dog for too long. Have you already agreed on the $77k purchase price with this buyer? Too bad he didn’t come along while it was still priced closer to the $90k range.

Finally, don’t forget this guy would need permission from the BK court before signing a note with you, as long as he’s still in repayment.

Brian (NY)

Your suggestions for the best way to sell this dog - Posted by Ben (FL)

Posted by Ben (FL) on October 24, 2000 at 15:28:52:

Back in May I bought this house with a bank loan for 80% of the appraised value ($90,000 is appraisal, market rent is around $750). I started marketing it for sale for $85k or rent-to-own for $995 with $3500 down. After a couple of months I lowered the price to $79k or $895 per month with $2500 down. Now its $77k and $850 per month with $2000 down.

I just talked to a guy who wants the house, and we set up a meeting to get together tomworrow. He filed Chapter 13 3 yrs ago, but says he’d have it paid off in 18 months. He asked me if he could buy the house with owner financing if he put $10k down (I know, if he’s paying off b.k. why is he sitting on $10k?). He said he’d rahter own it sooner than later.
Assuming he’s a straight shooter, for now, I’m looking for suggestions for the best way to sell (CFD, wrap, assign ben. interest) other than convincing him that renting to own is the best option.
I took title ot the house in a landtrust with my self as trustee and my LLC as beneficiary. My loan balance is $73k.

was asking about owner financing if he put more mony down
I have become a motivated seller.

Here is a suggestion… - Posted by JGoodsen

Posted by JGoodsen on October 25, 2000 at 09:36:08:

Is it ownership he wants, or the benefits of ownership? You’d think having just come through bankruptcy he’d know better than to want to have things in his own name.

In any event, since you already have the property in a land trust you could make him a second beneficiary in the trust. Make the $10K an equity contribution to the trust. Have him lease the property on a triple net basis. As a result of this he’ll have all the benefits of ownership without having to have his name on title. Everybody wins.

In case you didn’t follow this, for the most part this is what takes place in a PACTrust. There is a gentleman that posts here sometimes from Florida that could probably help you. Look for anything from Marty Weisberg to get his email address so you can contact him directly.