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Private Lending

Old 12-11-2008, 07:38 AM
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Join Date: Sep 2008
Location: Newark, DE
My Boats: 2002 38'Ocean Express Catamaran
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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!
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Old 12-11-2008, 07:55 AM
Join Date: Oct 2003
Location: Blaine, TN
Posts: 1,374

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...
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Old 12-11-2008, 08:13 AM
Join Date: Dec 2002
Location: cincinnati, ohio
My Boats: 1999 Mystic 32 cat
Posts: 607

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!

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Old 12-11-2008, 08:32 AM
Join Date: Mar 2008
Location: Edmond, OK
My Boats: 44' Trojan, 36 Skater
Posts: 113

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!
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Old 12-11-2008, 08:58 AM
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Location: Toms River, NJ
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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.
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Old 12-11-2008, 09:13 AM
Join Date: Mar 2005
Location: Montgomery, Texas
My Boats: 42 Fountain
Posts: 3,909

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...
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Old 12-11-2008, 09:44 AM
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Location: Iowa - Missouri
My Boats: 1997 Cig Kevlar - powered by Boyd
Posts: 3,904

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.

Last edited by Von Bongo; 12-11-2008 at 09:48 AM.
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Old 12-11-2008, 10:30 AM
Join Date: Jun 2005
Posts: 9,587

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 case the guy missed/stopped making payments.
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Old 12-11-2008, 12:13 PM
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Chinese payment plan= wunlumpsum
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Old 12-11-2008, 01:32 PM
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Location: Omaha
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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.
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