We are in negotiations with a park owner who has 4 parks for sale. He is willing to do owner financing but he has concerns. Here is the deal 4 parks 131 spaces total. We purchase two parks for 750k bank note and he will owner finance $1,750,000.00. We are using the bank note as our down deposit. We would be taking a bank note out on two of his parks and he would be financing the rest of the package. The 750k would be below market value for the two parks on the note. His concerns are if me and my wife/business partner both die how does he protect himself with the two parks we have financed. What if we walk away from his two parks he has owner financed and keep the two parks we have with the bank note he feels he would be out of the two parks for below market value and get screwed. What happens if there is a divorce between me and my wife how does he protect him self with the two parks we have financed. Any advice would be greatly appreciated on how to possibly make this a win win for us and the current owner.
Trying to re read your post and having a hard time understanding what you are specifically asking. First, before anything, do the deals make sense? This would be very important to know (utilities, any poh, rents, occupancy etc).
Next , are you saying that the total sales price is 2,500,000 which is compromised of him taking back 1,750,000 and the bank note is something you are thinking about getting from the bank as your down payment? And I don’t understand , are you trying to put this only on two of the parks? Do you have the 750k or is this something you are planning on obtaining from a lender?
The questions that start to come into play, are you doing this loan with this seller non recourse or personally guaranteeing the loans? Sound like they want personal guarantees but maybe he is wanting more.
Not sure if you can do this, but maybe you can pull life insurance policies naming him as the beneficiary ? If you are starting to look at that stuff though man this better be really something. Im not sure of the limitations , but you can also look into key man insurance but not sure if that is applicable to your insurance.
Give some more clarity onto the specifics of the situation for better feedback .
You need the same assurances if Seller dies or has marital issues too. An attorney can help you both draft the note so that you can have provisions kick in (applying to both parties) to ensure that payments continue and can be received in the event one of these events happens.
This may involve using a mortgage servicing company for Seller and means to ensure your Estate or Trust distributes payments.
There should be several ways to do this, but you should just agree an attorney to both use to represent both sides to arbitrate this.