Re: buyer financing problems - Posted by John/Indiana
Posted by John/Indiana on March 05, 2001 at 09:36:02:
I’m far from knowledgeble in this area and you will learn plenty from these folks…So heres my 2 cents : You’re making nothing on it now,plus your still paying lot rent.Get a down payment,get some cash coming in.Have your contract drawn up so if they’re late on the payment,they pay a DAILY penalty after say,5 days.Have the contract worded so they are responsible for lot rent,utilities,upkeep,insurance.As for kicking them out,having to repair,etc…all this is not as difficult as it sounds.Thats why theres small claims court,sherrifs etc.Also have the contract worded so if they are,say,2 months past due on the loan(it is after all a loan,and they are buying,not renting,remember)they are to vacate the premises,notify you of such immediatly,and return keys,etc.Include a clause that requires them to carry home insurance,with you payable as the mortgagee in case of fire,storm,etc until the loan is paid…in other words,cover your butt.This may sound cold and cruel,but IF THEY DO GO BAD ON THE LOAN,you get the place back,regardless of damage,and you can then resell it to someone else.If this sounds too complicated,this is the simple version.No,its not hard hearted,its just good business sense.Run a credit report on the next person who makes you an offer.
How much are you asking? How much do you want down? Are you being realistic? Order a copy of Lonnies book “Deals on Wheels”, its about $30,you’ll have it in a week,and its worth 10 times its price,minimum…Remember,your not the landlord,your the bank.All maintenance is their responsbility,not yours.This way,if they do go bad,you have some legal recourse.Also include a clause they can’t move the home until your paid off.Remember,you’re making nothing now.NADA.With a good down payment,and checking out the buyer(not that hard to do),you’ll at least have some income,instead of a negative cash flow,which is what you have now with lot rent,utilities,insurance.Make money,don’t spend it.Yes,the possibility exists they’ll go bad,but in the meantime you’ve earned some cash,and will earn more when you get it back,because it will be the same cycle,down payment,etc…If you desire to be real hard nosed,include a clause that you can inspect the premises with proper notification(check your local laws,lol)and if the property is neglected,have the right to foreclose and evict immediatly,if they are in arrears.Its your laon,you can phrase it your way.Conseco has 7,000 manufactured homes repo’d at this time,Greenpoint also has many.They would much rather finance one of their homes to your buyers instead of yours,ya know? Hey,fellow posters,am I doing okay here? I’m new at this too…Good luck.Sadly,regardless of how nice,well maintained your home is,somethings only worth what someone can pay,or is willing to pay.Better you get the money,with interest,than the bank.Make your repayment terms for only a few years,rather than long term.Say 2 to 3 years,thus the balance will decrease much quicker and your possibility for a loss decreases.Feel free to disagree.John.