owner finance
 

ive goy a couple buddys wanting me to carry a note on a boat both r good financially, one just started a wrecker serv , one just bought a lake house so both credit to debt ratios r close, they want to give 6000 down on a 45000dollar note, for 3 years and then get there own financing. with the market the way it is im leaning towards this. what do u think.there will be a contract written by a lawyer,they will pay for insurance and repairs.

Credit worthy people can get all the financing they'd ever want at market rates. This would be a really bad idea on just one guy, but a partnership? Even if they're both good as gold, a pi$$ed of wife, a divorce or a bad business break for one of them sinks them both.

If don't mind losing the boat and the friends, I'd say go for it.

I would not do it on anything that depreciates or has an engine that can blow up.

I saw this exact thing happen a few years back and both parties lost.

Run. Run like hell. I did a partnership with my very best friend on a boat years ago and it cost us years of war over stupid chit that just should never have happened. It just don't work. I have seen way to many friendships go down hard over money.

I wouldn't do it. Sounds like a bad idea. Just my .02

Don't do it. I have been in that position and it will cost you a friend. little things will start to eat at you and then BAM!

Regardless of how good their friendship might be, this is not a good ide. In fact, it's never a good idea to hold a note on something that can be moved, hidden orrapidly de-valued. Deals like this happen all the time, but the odds are stacked against the loan-holder on reaching the end with as much money/profit as assumed.

Play the odds on this one and don't do it.

Tell them Chinese Financing Only: WON LUMP SUM!

:hitfan:never...ever...carry a note on a boat that can and will have some sort of problem...he will not want to pay to fix it and then not want to pay for a boat that he can not use...it WILL cost you a friend....

I think he is selling it without power.

Sounds like a great way to lose a buddy.

It is very tough to make it work,,,, run,,,

If you cant run ,,, then ,,, go to your bank and ask them to recieve the payment ,,, take your friend to the bank ,, and go thru the process,,, leave him with the impression that he is making the payment with the bank and it will affect his credit ,,, then if the deal goes south ,, just have the boat repoed and you are not in the middle as bad as if you were the bank !!!!

RHC

As everyone else has said, don't do it! You will risk not only your money, but your friendships. :(

I did this once on a boat and I would NEVER do it again. I ended up having to repo my own boat back (after pushing his car out in the street to gain acces to my boat). It was a nightmare. The boat came back destroyed. Never again. If they can't get bank finacing, they don't need the boat. Dave

BINGO !

I wouldn't. If they could afford it, they would be able to get a loan.

Bad Idea For Sure!
WILL TURN THIS :cool-smiley-026: INTO THIS :angry-smiley-038:

BAD idea - friends and money don't workout

No way!

you haven't said if they couldn't get a loan or whether you were just trying to facilitate a deal. enlighten us.

think i will just put it on the market if they want it then they will have to get a loan or a bigger down payment(ALOT BIGGER)

As a broker I have had many the phone calls from friends saying they sold the boat on there own and they didnt need me as a broker. Many end in the "I carried the note and the buyer isnt paying.. how do I get it back"? Next call... "Its ruined... Im gonna file against the guy"... Next call..."Can you help me find him"?
I have never recieved the "I carried the note for many years and everything went great... we are going for drinks tonight!"

You'll lose one of the two - The Cash or the Friend!

Bad Idea

Now thats funny :D


I sold a Baja to a friend a few years back. I financed it for him - to make a long story short, we are not friends anymore AND I got screwed out of about 20k. Don't walk RUN from that deal.

I wouldn't do it, i did this with my brother, it didn't end badly but there were times when it could have easily gone sideways, i would not do it again

POLONIUS' ADVICE TO LAERTES IN "HAMLET":

...Neither a borrower, nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

--William Shakespeare

Now, if you insist on doing it, and I have, over collateralize. Take a mortgage on everything you can to secure the loan, and make sure you get mortgages on property from both owners. Real estate is best. That way both have a bunch to lose and you will be the last person that gets screwed if one goes belly up -- the other guy has a huge interest in making sure you are paid.

Make sure they are both liable for the full amount of the loan, not just their portion. Then make sure you record your security interest to the extent your state allows it. Finally, include an insurance requirement in case something happens to the boat.

If they think you are being greedy by over-collateralizing, tell them it won't matter because they can obviously afford it or they wouldn't be asking a friend to tote the note. How much they give as collateral won't matter since they are going to pay.:cool-smiley-011:

Sounds like you are selling them your boat?

Ah hell, either way it doesn't matter, don't do it!

I have a simple answer when asked to do something like this: "I'm not a bank."