Private Lending
 

Dear Abbey.

Need some advice. I am selling a boat and I offered some financing. I am just selling the hull. I sold the motors to someone else.
All I am doing is unplugging the motors, pulling them out.. I am leaving the exhaust with the boat. He has tried to get a lone on it but it is older and most banks won't loan against it or are not even doing boat loans at this time.
My Dilemma: The guy lives 1200 miles away. I am selling it for 25k. I want to help him by holding the note. He says he can have it paid off by the end of 09' He wants to give me 6k down.. Finance the rest.
He also wants to have me write the bill of sale completely diferent then the note because of taxes in his state.
He seems really nice. Honest. He has a good job and does his wife... How do I write the note or bill of sale so if by chance he falls on hard times I can get it back or cover my A**..

Thanks Abbey,

Toooo Nice of a guy!

Have a 2nd note thats a lean on his house. Everybody seems great and trustworthy while their trying to make a deal. once the goods are in their possession they usually forget all the stuff they promised. cover your azz, then cover it again just incase. and just be sure in your back up that it states you get the boat back, & the house. If he missed one payment he better be pulling the boat 1200 miles in my direction the next day. Be careful...

Won't work - Go with an easy payment plan for the guy - one payment, up front, gets the boat!

Look at the situation US lenders are currently in and they do it every day with teams of lawyers.

Good Luck!

Katz

Get permission to run his credit if over 800 draw contract up with default stipulations & interest your call:rolleyes:

You will most likely complicate your life if you extend credit to a complete stranger on your boat sale.

There are people out there that take advantage of nice trusting people all the time. They give you 6K down and then never make a payment. Even if you can get the boat back, it will be years and it will be further complicated by him having his engines in the boat and the whole 1200 mile distance between you. If he can't get a 25K loan using equity in his house or some other colladeral, he shouldn't be buying the boat!

No matter how nice he is - if he can't pay $25k cash for the boat when it has no motors and he has to come up withthe scratch for that as well as rigging.....I would definately pass.

Easiest plan for him - home equity or slap it on a credit card cash advance with 1.9% interest for 12 months.

What kind of boat? How much is it worth? I would put it on ebay before I did anything. I have bought and sold several boats on ebay. All closed outside of ebay via wire transfer before the boat left my hands. IMO ebay is the best way to sell a boat.

It is almost impossible to get a loan without power. If he has power tell him to bring it up and then get the loan as a complete boat. If he does not have power he will have a hard time rigging a boat and paying you...

If someone can't get a loan, you have to ask yourself real hard, why do I want to be the bank for someone that a real bank doesn't want to lend money to?

How are your repo skills? Skip tracing? You ready to write off everything except the deposit? Track insurance that is protecting your collateral in case it burns up or is stolen? What due dilligence are you doing on the borrower? Getting a financial statement and a couple years tax returns? Calling his employer or accountant to verify the income and the financials? Do you have verification of his assets and comfortable that he has a secondary source of repayment if the primary source doesn't pan out? Hows his credit, if he's missed payments or had charge offs with someone else what makes you think he will be more motivated to pay you? Is he a home owners and less likely to disappear?

If you don't have good answers to all those questions then you shouldn't be lending money.

Why not just hold the boat and let him make payments to you like a layaway plan? It will give you total control and give him the incentive to make his payments faster.......

Just make sure to draw up a contract stronger than Long D!ck Dongs...............in case the guy missed/stopped making payments.

Chinese payment plan= wunlumpsum

If him and his wife have such good jobs, then why don't have the cash or why can't they get the loan??????????
Chances are they owe money on everything and don't have anything to use as collateral. Anybody with pretty good credit can come up with 20k if they need to.

i held the note once on a boat i had and for me it worked well. it took him 3 years to pay the boat and trailer off. he always paid on time or early. with all the risk involved, i am not sure i would do it again but it was a good expierence and i did charge intrest.

Part of the story is that the boat is an 1989 baja. It is listed on OSO under boats, It has a lot of bells and whistles. The 3 banks he called to get financing told him the year is too old and the one bank told him they were doing boat loans for a while.

I changed the add so it doesn't offer it anymore. I thought it would help selling but I guess not.. I didn't want to be on the "beware" section

Payment plans don't work and you are quickly forgotten. Have him try to use a credit card check or if you have a way to run his card for the payment. Then he has his own payment plan, he can pay as much or as little as his can to the card company.

He has a good job and does his wife...


Glad to hear he still "does his wife", that's got to count for something!:drink:

we ran into a similiar situation for our cafe, most major lenders didnt like the age. ended up using a local credit union.

May have to tell the guy to sit out a year or two to get enough saved for a large down payment, the full amount or a different boat.

i have an aquaintenance at work that lended a FRIEND $40k because they fell on hard times. Now the guy wont even call him back, etc. Real ugly situation. If someone you known could do that after being friends for 15-20 yrs, think of a complete stranger...

I can finance anything as old as a 1919 :D

www.essexcredit.com

my buyer read my post on here:

This is what he wrote:

I noticed your post on OSO about personal financing and it sound like you have some
reserves. I thought since you offered financing in the listing, you were ready to
go and were familiar with a process. As much as I want to move forward, I think it
may be best for me to take my chances and see if your boat is still available in
April or May. I am still moving forward on building the motors and if the boat is
in storage, I may luck out and we can start this again in 09 and I may be able to
just purchase out right and forget about the financing. I don't want to have you
nervous or uneasy about being taken for a ride and would prefer to gain a friend
out of the deal. I would still like the additional pictures you talked about and
would like to stay in touch over the holidays.

DaveP how can I get him in touch with you??

I think from the way he is talking I can still salvage this. His Daughter is getting married and I think he is just being cautious that the wedding bill is going to get expensive...

I just want to sell a boat.. I should take most of the blame for offering financing..

Thanks for everyones help

Not to be rude you just cost yourself $$$$ if he holds out become the bank take the ^$6000
hold title till payed off!!!:ernaehrung004::cool:

Run for the hills.

Meaning do not finance yourself. Having the title won't mean **** when the **** hits the fan. Will take attorneys and all kinds of time. If the guy can't afford or finance the purchase how in the world is he going to afford everything that's needed to spend a day making no money out on the water.

I can't take someones money.. not my style.. If he can pay for the boat fine. but if he gives me a deposit and can't go through with it. I will send it back.. I talked to my attorney this AM he said it is so hard to get stuff back unless you are a big corporation like GMAC, Ford motor Credit or a bigger bank.

Not some guy from DE that is trying to be a finance Company.
Plus it will be my boat his motors. Bigger Mess then I thought it would be...

DaveP says he can get people Financing. I am going to send him that way..

ONLY for complete boats....no bank in the world will touch a boat without motors.

But how do you get financing for a boat that is worth 20k by NADA when its got 45k in motors in it?

I got over 100k in reciepts in it but the book value says it is worth 20k How do you get 45k in financing?

Welcome to high performance financing LOL. Thats why the older and/or custom boats are harder to sell than a new(er) one even if its 150K vs. 50K

As it was not with a boat but on a a condo project my company was completing . I personally financed one homeowner because they couldn't get financing.
I wish I hadn't done it now, the customers are already 3 months behind since August of 2008. I cant say people hadn't told me so!

Its a hard time to find people willing to give up their hard earned $ and the Banksters are all running scared as well.

It will turn around eventually it always does.
Good luck!

My last boat had an asking price of $20K it was a 26' Sleekcraft with a 502. Credit union booked it at $12K (no way I could buy one for $12K). I had a marine appraisel done on the boat that showed it appraised for $26K and the credit union cut me a check/loan. Maybe you could go that route.

Agree on a price and take a non-refundable deposit of $2000 down and a balance due in May or when the buyer says he can pay and than he can pick it up .Stay in touch, tell him to keep you informed of any changes and go from there.

I have bought boats this way and sold this way.Long as your not a Azz like the Donger things will work out.

He sounds like he wants the boat and understands your uncertainess about the loan.So you keeping the boat till it is paid for does not sound like a problem.

Plus a sale in May is better than no sale.

Have a NAMS or SAMS Surveyor survey the COMPLETE boat. If it is in great shape, it should appraise for $45k or better.

It is then my job to get the bank to lend based on the survey and not the NADA value.

Ok What is a "Nams or Sams" and how do I get in touch with them.

I would be willing to do that. It might help with the sale of it..

Doesn't any one have a1967 - 1970 camaro Z28 they want to trade me for it?? Or an older Street rod complete..

Title for Title. Done... I am rolling and they are Floating!!

Thanks again everyone.. This may still not be over for me yet!!

:evilb::ernaehrung004:

Complete Boats = Boat WITH motors, running and fully operational

SAMS = www.marinesurvey.org
NAMS = www.nams-cms.org (website is down for some reason?)

Thanks so much.. In 24 hours I have gotten so much info..



:Score-101010: Thanks Everyone!!

Just to let you and Scott know in Louisiana any boat over 10 yrs old is considered tax excempt. I now Scott personally he is not the type of person looking to get over on someone. Lets face it in the used boat world someone has to trust someone. You made the offer and he took you up on it,thats smart business in my book.6K deposit on a 20k boat is a great deal,10-20% probably would have made the deal fly.
I have purchased boats from owners and builders,most bad apples float to the top.
I think holding the title and registration does mean you still own the boat and you have 6K to hold.Sell the boat and protect yourself in the bill of sale,you seem like a nice guy and Scott will come through. :ernaehrung004:

Thats pretty sad personal attack on someone you dont even know.You could have recommened not to make the loan without bringing up the other bullSh*t.The ad read owner finance if I was to purchase it and let it sit in my back yard who gives a rats as*!!As long as the owner gets his balance my affording anything else is none of anyones business. Really you got people on here making comments that dont even have a membership.I guess they shouldn't own a boat either and we wonder why so many people are going to serious offshore. :eek:

And if the buyer puts the boat together and goes out and accidentally kills someone....the OWNER plus the BUYER are both on the hook.

Sorry but have to disagree with you on this one (in today's litigeous society)

I agree, but even once its sold I have had buyers not transfer the paper work. You need a bill of sale thats stamp by a notary. I owner financed the sale of my last boat and had attorneys do all the paper work.
They claimed I was protected.He could always keep the drives till paid in full.

I do honestly trust the guy... I myself have never had a doubt that he would not pay for it.I talked to him several times and I talked to his wife... Thye both seem honest as the day is long...

I have a Friend that owns a Marina and Dealership.. for 70 years. He said NO way, your putting yourself at risk. He gave Scott 3 finance comanies to get financing. No luck there. He thinks there is more to the story... I am the optimist... The way I was raised. You look me in the eye and tell me something... I beleive it.
My problem is selling the boat for one price... Writing the bill of sale( and notorizing) for another to help with taxes. He is there and I am here..

TRUST ME I want to sell the boat. I want to help someone out if need to. I have help many times from friends to get through something. I don't need two boats. Plus my wife wants me to buy a Pontoon in the spring so my 19month old boy is going 100mph on the water. (not sure of her thinking that he wouldn't like it !!)

My thread was to get some advice on how to handle this matter. 9 out of 10 say it is not good. You say yes but you know him personally.

It is not over just got to figure the legalities out so it works for everyone.


:party-smiley-004: Sit back and we shall see!!

Unfortunately in todays world, you can have a 500 page contract protecting yourself but you can still be dragged into court to defend yourself and the 500 page document.

I heard that!! I don't know if there is a way to secure yourself today and not spend 5k in a lawyer to get your chit back!!

I have talked to two lawyers in 48 hours. Both have said.... Do a layaway plan ... That is it.
Everything else is to risky...

BINGO! :D

If he can't afford to buy the boat, how is he going to afford the motors, the up keep and repairs, insurance etc. If he can only come up with $6k for a perofrmance boat, he is out of his league.