Getting ready to close on a couple of parks that will be financed 70% through the bank with the seller carrying back an additional 10%. Does anyone have a good template of a Seller-Carry promissory note when it is a carry-back situation (subordinate to first mortgage)? I’m trying to understand how the Deed of Trust, which is normally part of the seller-carry note - would come into play when it is a carry-back note. Couldn’t find anything on Frank’s Bootcamp Library.
Before you go down that road be sure that the bank will allow secondary subordinate financing. Many banks will not and you do not want to be in default on day one.
In this case the bank is actually encouraging the seller carry-back.
OK. Two questions here.
First is the promissory note.
Second is the Deed of Trust.
As a refresher - the note contains the details of how the money is to be repaid. Who are the parties, loan term, interest rate, payments, etc.
The Deed of Trust is the security device which protects the lender in case the note is not paid as agreed.
In order not to practice law without a license, I won’t/can’t give out instructions on a public forum.
One more thing - we NEVER construct our purchases the same way we construct our sales.
Your questions will be answered more appropriately by your lawyer. They will draw up all the necessary legal contracts and paperwork. Your Bank should be insisting this be completed by a lawyer. If not then you should be the one insisting.