Posted by Tim (Atlanta) on April 20, 1999 at 12:32:49:
I agree that 10% buyers are hard to find…
In your scenario, would you be able to sell the first lien note for face value of 80% of appraised? Seems to me that the note buyer would want a discount, which would eat into whatever downpayment the buyer was willing to fork over.
I like the idea of taking back the 2nd, but doesn’t that leave you open to the possibility of the buyer not paying on the 2nd? Wouldn’t you have to satisfy the first before foreclosing on the 2nd? I have a friend who tried that and got taken to the cleaners. He was selling properties and taking back 2nds. After a few years, when he had the balloon come due, noone paid off. Then he had to refinance the first in order to foreclose on the second. Did he do something wrong here ?