Posted by Tim (Atlanta) on February 20, 2001 at 12:04:23:
I don’t agree with your figures. If your partner has already put $3500 in the deal, got nothing from the down payment, and has to put in an additional $5000, he is in the deal for $8500. For that $8500, he gets 60 payments of $214.94. That is a annualized yield of 17.80% according to my handy HP 17BII. Not 69.7% return. As a note buyer, I would say that deal stinks! If I were you (a note seller), that is a good deal. To minimize your partner’s risk, guarantee the payments. These types of investors are very hard to find, keep him happy if at all possible.
If your partner wants to continue with the deal, you need to write up an Assignment of Interest agreement. This agreement would assign all of your interest in the note to the buyer (your partner). Again, I would recommend that you guarantee the note payments and take care of any repossessions that may be necessary. Your partner likely does not want to fool with repossessing a mobile home. That is why he needs you.