Lump Sums Due and Land Contract - Posted by Stacy (AZ)

import · February 21, 2001, 5:11pm

Posted by Stacy (AZ) on February 21, 2001 at 22:17:34:

Hi Jim. Thanks for replying. I suggested a L/O to the buyer, but he had a couple of problems with it. He considered it too much to spend $10K on option consideration while only having a lease, and he wants the tax deduction for interest expense. I could play hard-ball with him, and tell him that’s the only way. However, with a buyer like this (cha-ching), I’ll work with him. In Arizona, a Land Contract forfeiture is almost as quick as an eviction, so it’s not that much riskier for me.

Stacy

import · February 21, 2001, 5:11pm

Lump Sums Due and Land Contract - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 21, 2001 at 18:11:09:

A man wants to buy a house I have on the market. I’m selling via Land Contract, and I told him I wanted $15K down. However, he wants to give me $10K down now, to move his family in, and another $10K down in two months, followed two more periodic $10K payments to increase his down payment to $40K.

I’ve never done this with a land contract. How do I structure it so if he decides not to give me those lump sums, I have recourse? Actually, I told him that once he got up to 20K, that would be enough. But he wants to give the whole $40K.

Do I just specify the dates and payment schedule in the Land Contract, along with the monthly payments, so if he misses the first lump sum, I have recourse? Or, do a make separate notes for the payments?

Any help would be appreciated.

Stacy

import · February 22, 2001, 7:55pm

Re: Lump Sums Due and Land Contract - Posted by B.L.Renfrow

Posted by B.L.Renfrow on February 22, 2001 at 20:55:41:

Hi Stacy,

As long as you have the payment schedule specified in both the land contract and the accompanying note, that’s all you need. Then if he “forgets” one of the lump-sum payments, he’s in default and out he goes.

Brian (NY)

import · February 22, 2001, 12:29am

The First Thing I Thought… - Posted by Rick(CA)

Posted by Rick(CA) on February 22, 2001 at 01:29:17:

Stacy,

Maybe I’m just paranoid, but the first thing I thought was this guy was appealing to your greed by offering you WAY more than what you were asking… “just give him time to spread out his payments AFTER he’s in”. I surely do hope you have a real buyer there. But, I keep thinking of Pacific Heights. lol

I sure hope you do set up your contract to protect yourself.

Just my (creeped out) thoughts. lol

import · February 21, 2001, 11:14pm

I’ll second Jim’s version (nt) - Posted by Paul_MA

Posted by Paul_MA on February 22, 2001 at 24:14:24:

g

import · February 21, 2001, 8:46pm

Re: Lump Sums Due and Land Contract - Posted by Vic

Posted by Vic on February 21, 2001 at 21:46:42:

Stacy,

Here in Louisiana those 10K payments would be handled the same as the monthly payments. They would be part of the land contract & if he defaulted on those, he could lose the property.

Vic

import · February 21, 2001, 6:55pm

You actually told him $20K was enough!! - Posted by Milt

Posted by Milt on February 21, 2001 at 19:55:36:

Look dude, you get as much money as the buyer wants to give!! You never EVER tell a seller that wants to give more a no answer!!!

What is wrong with you?

How many deals have you done, and have you bought any courses yet?

If I were you, I’d invest in Bronchicks Cash Cow Material. "“Money Well Spent”

You’ll get better, I promise

Milt

import · February 21, 2001, 5:46pm

Re: Lump Sums Due and Land Contract - Posted by Jim IL

Posted by Jim IL on February 21, 2001 at 18:46:50:

Stacy,
Why not just put him in there now on a Lease/Option?
Take the first $10k as option money, make the total option money as $40k, and break it down to a payment plan you set up in the agreement. (option agreement that is).
Then have a seperate lease, and this way if he fails to make the other lump sum payments, then you can evict.
Much easier than a land contract in my mind.
You may even put in the L/O that once all the $40k is too you, it converts to a land contract.
If you really want one.

Just some rmbling thoughts,
Jim IL

import · February 22, 2001, 8:52pm

Re: Lump Sums Due and Land Contract - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 22, 2001 at 21:52:56:

Thanks Brian. This board is invaluable even for the non-newbies. I guess I’m a sophomore by now. What a resource. Hope to pay you back some day.

Stacy

import · February 22, 2001, 8:25am

Re: The First Thing I Thought… - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 22, 2001 at 09:25:38:

I’m definately with you, Rick. That’s why I want to get it right, so if the next payments are “forgotten”, I’ll have recourse. I’ve looked into it further, and determined the terms and schedule of payments will be both in the land contract and in an accompanying FNMA style note.

I’m generally a good judge of character, but that’s nothing to rely on where real estate and my money come together!

Stacy

import · February 21, 2001, 9:03pm

Re: Lump Sums Due and Land Contract - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 21, 2001 at 22:03:28:

See, Vic, that’s what I was hoping. I’d never encountered this before, but it makes sense. The land contract itself details the monthly payments due, so this would be handled the same way. Missing a payment would be a default, whether the buyer missed a monthly payment or lump sum payment.

Thanks for your help.

Stacy

import · February 21, 2001, 8:07pm

Re: Cute, Milt. - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 21, 2001 at 21:07:26:

Thanks for your helpful answer to my question, “dude”. By the way, you really have no idea what you are talking about. Here’s a quick lesson in due diligence. Until you have enough facts, don’t jump. For example, the way you jumped to all of the incorrect conclusions in your post.

Want to try to answer the question, or are you just here to make yourself look smart?

Stacy