Posted by Ernest Tew on May 01, 2000 at 06:26:25:
After selling your first homes you should be able to find a private investor (friends, relatives, etc.) who would make you a personal loan, secured by a first lien on the homes you sold. Offer them a higher return than they are getting on their savings, bonds etc. (for example 15%). If you keep your payments lower than your receivables, you will begin to build a monthly income. If you ask for a loan of just enough to get your money back it will be only a part of your receivable and what the home sold for, making the lender feel safer in making the loan. If you have a good banking relationship, they might make loans to you, secured by the homes.
Satisfy the lender’s most important consern: that the loan will be safe. Point out to them that the promissory note makes you personally liable for the loan, which will be secured by a first lien on the home. Since the lender doesn’t take title to the home, they will have no liability in the event someone is injured or decides to sue.