Posted by JoeSoCal on August 02, 2003 at 15:02:42:
Yeah, I have mulled that over.
However, as I stated above somewhere, I would like to have a cash flow coming in from the borrow/land seller, preferably on a monthly basis.
While I would only be doing this type of transaction on properties with lots of equity, I dont really want to foreclose and go through those hassles.
The costs associated with finding someone to lend the money to, due dilligence and time invested on the property, etc., the costs of transferring cash from one investment to another, etc. is what is driving me to find ways that my seniority isnt threatened nor my “loan” paid early.
With that said, my thinking (and I may be wrong) is that an individual would be more likely to walk away from a property if they havent made monthly payments for 3 years, than if they were making payments.
Secondly, if they are making payments and then fail to honor their obligations, I can know sooner, rather than later, and take appropriate action (foreclosure).
All things being equal, I would rather foreclose in the first year or two because the borrower has failed to make their payments, then live in the uncertainty of not knowing for 3 years.