Happy New Year to all!
I have what seems like a no brainer, but I can’t get my brain to agree.
I am about to go to closing for a park that the seller is using (along with approx 6 other properties) as collateral on another loan. This is a seller financed deal. His bank told him they would release the property if he paid a big portion of the loan. He wants to keep his loan on it until I pay him. His bank “doesn’t know” he is selling it since it would trigger a payoff event for him. The contract from his atty even excludes me from filing a memo of contract with the state/county.
My atty said my only exposure is my down payment if he fails to pay on his loan and the bank “reposseses” the park. This deal would have a balloon in 5 years. My figures indicate I would ahead of my downpayment in the 5 years without doing much except raising the rent.
He has been making all the payments on his outstanding loan, but hasn’t paid taxes on this park in 2 years. I have a clause in the contract the the title company will pay all old and current taxes before distributing the downpayment to him.
Has anybody else had a similar deal? Any advice besides RUN! ?
Thanks in advance