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Why let banks have all the fun?

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Old 01-25-2012, 03:28 PM
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I don't remember if this was the original poster of a similar thread or a different member.
I was in the same situation as a seller of a wake/ski boat.
I contacted my attorney for my pool construction business and here's a link to his thoughts.

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Originally Posted by huskyrider View Post
Although I've never owner financed a sale of one of our toys I almost did once, but the buyer couldn't even come up with the down payment.
He told me his Dad was financing him his down payment and I stopped the deal.
Here's what my attorney (real estate/contractual law) came up with.
10 to 20% down (my choice was 20), title transfer, seller is 1st lien holder(moves liability away from me in the event of a suit), buyer pays 10% apr on his choice of payments up to 84 months, and buyer keeps a comprehensive insurance policy with me as a certificate holder (insurance company will contact me if he defaults) and they have a agreed value policy. He was then going to work up a simple interest amortization schedule payed on the timeline of payments.

I hope this helps.

See ya,
Kelly
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Old 01-25-2012, 03:36 PM
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Don't forget to install a "Go Jak" as well. It makes locating the property MUCH easier should a default occur. Just think of it as very reasonable "insurance".

There is also "lender" insurance policies available, but this may not be cost effective for just one loan.

Depending on the risk taker you are as an individual, Loaning money can be a much better return than just investing it in stocks or a savings account. Lets face it, is the stock market any less of a risk?
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Old 01-25-2012, 03:52 PM
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Way to many issues with this. I can go with USAA and get up to 99k for 5-7% interest depending on years financed. As a seller I have to worry about getting my money monthly and going back on the buyer if something goes wrong. A bank has a hard enough time re-claiming property and they have more money and lawyers than we do to do it for them. Plus if I sell I want the money no and wait 5-10 years. Bad idea. On property or something I can see a rent to own, but houses are stationary and are less likely to be damaged or stolen, also boats depreciate so fast. bad bad bad idea.
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Old 01-25-2012, 03:58 PM
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Would people be interested in doing this if a third party handled the lien, collected on the account and handled repossesion of the boat if neccesary? For instance "Joe" sells his boat to "Bob" for $25000, Bob collects $5000 down. Joe takes a loan from Bob for $20000, but it is handled by "3rd party inc." Bob recieves a percentage of each monthly payment (including a portion of the interest), 80% as an example, 3rd party inc. keeps 20% for servicing the account, they handle the paperwork, collecting from Joe if neccesary and repo if it comes to that. This is making it simple but is this something that is marketable in your opinion?
The $20000, would break down to $405.53 monthly at 8%, Bob would recieve 19,464, and 3rd party inc. would collect the balance in this example.
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Old 01-25-2012, 04:00 PM
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Originally Posted by huskyrider View Post
I'd have to disagree with both those statements.
I see no additional risk on the buyers end of the transaction, the seller is taking quite a gamble.
And, I don't really see a market potential unless the seller sold his rights to the note to a 3rd party for less than the value of the principle. Then the 3 party will reap a return on both the interest and the additional monies from buying a promissory note at less than face value. It would be a great capital gain over time but comes with considerable risk.

Just my .02

See ya,
Kelly
I think you do have to be careful in this aspect. A bank has no personal ties to the property like an old owner. He knows his boat and he now knows where you live. If hes slick with paperwork and has a lawyer pal there could be a potential for nice scam. Its just way to personal for me, as a seller i have the constant threat of the buyer saying this is broke and this wasnt what I thought I bought, on and on. When I sell and the property leaves my driveway its no longer mine I dont want to worry about it, even if somebody left the driveway and came back 5mins later, sorry its now yours, new terms will be dictated.

And on credit unions, the one I work with PEN FED what a royal pain in the ace, red tape like a mofo. But they do have the cheapest rates. They are such a pain I have cut off the loan application process in midstride and gone elsewhere. USAA is a close second and beats just about everybody.

Last edited by soldier4402; 01-26-2012 at 07:05 AM.
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Old 01-25-2012, 04:01 PM
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This I imagine would be aimed more at people with cash incomes, or boats that don't neccesarily meet traditional lending criteria. If someone is boat shopping with a 700-800 credit score, this would not even be a consideration.
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Old 01-25-2012, 04:04 PM
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Originally Posted by 007joe View Post
Would people be interested in doing this if a third party handled the lien, collected on the account and handled repossesion of the boat if neccesary? For instance "Joe" sells his boat to "Bob" for $25000, Bob collects $5000 down. Joe takes a loan from Bob for $20000, but it is handled by "3rd party inc." Bob recieves a percentage of each monthly payment (including a portion of the interest), 80% as an example, 3rd party inc. keeps 20% for servicing the account, they handle the paperwork, collecting from Joe if neccesary and repo if it comes to that. This is making it simple but is this something that is marketable in your opinion?
The $20000, would break down to $405.53 monthly at 8%, Bob would recieve 19,464, and 3rd party inc. would collect the balance in this example.
why pay somebody to handle it, and lose money? I want my money now, chances are I am selling the boat because I need another one and need the cash or I simply need the cash period. And you cant do this if you have lien on your boat to start with. just bad bad bad idea.
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Old 01-25-2012, 04:35 PM
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I'd have to say that every seller has different intentions of why their selling,
When I sold it was that we didn't use the boat enough anymore with the kids to warrant maintaining ownership. I outright own all my toys from the day I take possession. I'm not going to knock financing toys but it's an avenue I don't take. My buyer wanted a boat for his family to enjoy, didn't have the sale price in full, and seemed like a straight up young father. Since the only offer I took was an insult I contacted my counsel as to what he felt was the best direction on a contract if I decided to seller finance. His advice made perfect sense and his fee to draw up the doc's were acceptable. When I contacted the buyer and told him to bring the down payment and we'll go over the terms and conditions of the deal he told me about his borrowing the money from his Dad for the down payment. That's when I told him I was sorry but I'm backing out of the deal and perhaps he should see if his father would finance him 80% of my asking price as that was my bottom dollar. I never heard back and considered it to be a very good thing it panned out in the manner in which it did.

Soldier,
Your absolutely correct banks have no personal interest in anything they finance, it's all in the reward of the gain.

007,
Your correct too. I know many tradesman who declare less than they earn. They gladly offer cash discounts. This may be good for homeowners but it doesn't assist business owners who are in need of their services.

All in all, it's SELLER BEWARE.

See ya,
Kelly
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