Oh mgosh! A note qtn! - Posted by CarolFL

Posted by John Behle on January 24, 2000 at 18:35:49:

Even with a BK - as soon as his is discharged - they should be able to get some financing on a first. Karl would be more into what LTV would be possible at what rate. Usually it is about 65-75%. If that is the case, they wouldn’t necessarily need you and any secondary financing.

One possibility is they get a new first. You loan what is needed in a second. Possibly take some of their downpayment as an escrow cushion for the first - like 90 days.

Of course have the payments come to you and you pay the first.

Another option might be even more attractive. You go and finance whatever is needed. You may need very little down and it can come from them. Then wrap it to them on an AITD or “contract” at a higher rate. You might be able to give them the same or better rate than they would get on a new first on their own. Your yield will be spectacular. Most likely infinite. Again, I’d escrow some payments.

Of course there’s all that PacTrust and lease option stuff too.

Personally - I like wraps. Very simple, low risk.

Oh mgosh! A note qtn! - Posted by CarolFL

Posted by CarolFL on January 24, 2000 at 14:24:38:

I have a scenario which looks ripe for note financing and “after all this time”, I am a bit unsure of how to proceed.

A Realtor friend of mine has a HUD house up for bid which could be purchased at about $62k. She says it should appraise at $85-90k (HUD has an $98k appraisal but I’m not sure from whom). Her buyers were “in business”, the biz went south, and she filed BK not too long ago, his is not discharged yet but will be in 2-3 wks. However, their credit was pristine before, and since, and they are employed now and have been (OK so I’m short on details) for awhile.

Also she says they can afford “whatever it takes” to get them into the house as far as payments go … as far as cash is concerned, they would have about $5-8k to put into the deal.

SO - generally speaking, how deleterious is is this kind of BK situation when you have this kind of equity?

Gracias, all.