Seller Financing
I have a property for sale that is listed at 275k. I owe 150k. I have an investor interested in buying it for full asking price if I will take a note back. Of course I would need to negotiate terms on that note, but assuming I would be open to that, what is my recourse if the buyer defaults on that note? My understanding is that the buyer's incentive to pay is basically that he doesn't want to lose the house. That is a big stick, but do I have any hope of recovering that debt? The buyer is looking to do some improvements on the property and then flip it. I have an independent appraisal less than a month old that is less than my asking price(258k). I understand he thinks he can flip it for more money, but I don't have a lot of confidence that he can. Normally, I would say "more power to him", but in this case I have a vested interest with a seller's note. Any insight on what my worst case is in this scenario would be appreciated. Any insight on how to structure the note would also be appreciated. Thanks!
Author Seller Financing
jewelldp
Why don't you do a wrap. with a balloon upon resale, unless your comfortable in carrying the note. Have the buyer pay you and you pay the underlying note, keeping the difference for yourself? Increase the interest rate on the underlying note, and you make a little on it, and for all of your note. Good luck! Be certain the work they plan on doing is not substandard.