How Would I Take Advantage Of This?
A neighbor is offering to sell me a piece of property for $10k. He will accept payment in full at the end of three years.
How would I structure this to pay less now instead of the full amount in three years? The neighbor isn't interested in a reduced price now - he doesn't seem to understand time value of money. I would have to find someone interested in helping out.
What are you planning on doing with the property?
0% intrest for 3 years sounds like dang good terms. You can get into it for no money, and use the property any way you want for 3 years. Sell it after 6 months, use his 10K for 2.5 years, and then give it back to him.
You could use a promisory note, a Trust deed, or Contract for deed. I'd push for the promisory note.
Actually it abuts our property. He is splitting his lot, and the property in question lies directly behind us. He cannot build on that piece - either make it unbuildable easement or sell to me.
I will have to do a boundary adjustment and add it to my property. The piece has little value to anyone else.
I don't get it. He'll accept payment in full in three years? Pay him 10k in three years then. Pay less now? He's not asking for anything now, right? He's just asking for 10k in 3 years?
I'm OBVIOUSLY missing something!
Right now my plan *is* to pay him in 3 years. However, I am in a position to pay for it now. I want to find someone who will sell me a $10k note payable in 3 years for a discount now.
Perhaps my question(s) should be:
Is it better to buy a discounted note now, or pay him $10k later? What could I expect to pay for such a note?[ Edited by keelaboosa on Date 01/19/2005 ]
He might not understand time value of money, but you do. If you are anxious to spend some money now, you can accept his deal and go out and find a face $10K note that pays off in three years that you can buy now at a discount. When your note pays off in three years you can pay your neighbor.
[ Edited by edmeyer on Date 01/19/2005 ][ Edited by edmeyer on Date 01/19/2005 ]
That's exactly the kind of thing I'm looking for.
Got one for sale? How do I find something like this?
I haven't bought notes in many years, however, there is a paper/notes/mortgage investing forum on TCI. I am sure you can learn where to find them.
Back in my neanderthal days when I was buying notes, there were many seller carrybacks and it was not difficult to find them by advertising and disributing flyers. I am sure that the internet also has plenty of sources. You should do a fair amount of research on how to qualify notes, underlying properties and payors.
Your only option if you are not getting paid on a loan is to foreclose. Usually lenders wait for 3 months of non payment to foreclose. Your situation is a little different as he seems to be paying but not every month. I would suggest calling a lawyer (trustee) specializing in foreclosures and asking them that question. They should let you know the best way to handle this.[ Edited by reinatalie on Date 02/02/2005 ]
payment is applied to the oldest which would be Jan. he now owes you the late charge for Jan and plus Feb no different then if it was a rental. One question did you put this all down in writting?
He was sent a letter by my broker that originated the note that Januarys payment was not received and that in his contract, a late charge would be applied if not received by the 10th. He ,in essence, has ignored this letter and sent me only the monthly payment on the last day of January.