Archive for March, 2009
A Note from Henry – Seller Financing Rescues Contract for Deed Castastrophe
March 26th, 2009 categories: Seller Financing
Please enjoy this guest post by Henry Dvorken:
In all the deals I’ve done, I’ve had five problem cases. Let me tell you about my 14th street deal.
Minerva Cantu said she needed cash for medical treatments for her daughter. (It turned out she didn’t have a daughter, but that’s another story.) Anyway, I borrowed money and purchased her Texas property (on the tax rolls for $19,950.00) for $11,500.00. We entered into a sale-lease back-option back agreement.
Ms. Cantu was to pay $300 per month including $90 per month for Taxes and Insurance escrow; everything was great until she missed a payment. We never could get her on the phone, and certified letters were returned. After 3 missed payments we started an action to evict her from my house.
I received a phone call from a very worried young woman. She introduced herself as Jennifer Solis, and explained she was purchasing the property under a Contract for Deed and had lived there for quite some time. Cantu had sold a house she didn’t own to this unsuspecting young woman.
We held a meeting and I agreed to sell her the house and carry the note at the same price as she owed Ms. Cantu. If Cantu had been timely with her payments, she could have exercised her option and repurchased the house for $9,800 cash. The new note is at 9% for $17,700.00.
Sixty-seven payments of $340.00 give me a yield of 35.84% if I use the cash option price.
My investor is pleased to see her payments start again. She agreed to renew and extend her note in return for a greater payment and a new interest rate of 8.5%. I will have my investor paid off in 29 months. In the meantime, I receive a net of $50.00 per month cash flow, and will receive an additional $12,920 from Ms. Solis.
Ms. Solis is happy, I am happy, Mrs. Aldrich is happy. Only Ms. Cantu is unhappy. She tried to pull a sneaky and didn’t get away with it. Oh well “truth will out” as they say.
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Please Don’t Poo in the Corner if Your Offer Doesn’t Get Accepted
March 18th, 2009 categories: Seller Financing
Sometimes buyers are not very good sports when they lose in a multiple counter scenario, but this takes the cake! . . . or should I say ‘people pie!’
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Seller Financing is Not Stupid Financing – Get Socials and Run Credit
March 16th, 2009 categories: Seller Financing
Too many people fail to get the buyers to fill out a 1003 (loan application) and run their credit. News flash… if you want to sell your note for the best possible price down the road, get social security numbers! Anyone who buys your note is going to want them.
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