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Financial Consultants Bluefield WV

The Seller Finance trap begins with a seller who is having trouble finding a buyer. Maybe the park’s vacancy is too high, maybe the location is too rural or in obvious decline. Whatever the cause, the seller can either sit on the park for an eternity, or find a creative way to attract a buyer. And what can be more attractive to a buyer than an easy to qualify, below market interest rate loan.

Mr. Michael Shane Patton, CFP®
(304) 325-7334
1707 Jefferson St
Bluefield, WV
Firm
Raymond James Financial
Areas of Specialization
Asset Allocation, Business Succession Planning, Charitable Giving, Comprehensive Financial Planning, Employee and Employer Plan Benefits, Estate Planning, Investment Management
Key Considerations
Average Net Worth: $500,001 - $1,000,000

Average Income: $100,001 - $250,000



Data Provided by:
James Winter
Mountaineer Financial Planning, LLC
(304) 722-2065
410 6th Avenue
St. Albans, WV
Expertises
Cash Flow/Budgets/Credit Issues, Helping Clients Identify & Achieve Goals, College/Education Planning, Middle Income Client Needs, Retirement Planning & Distribution Rules, Tax Planning
Certifications
NAPFA Registered Financial Advisor, CFP®, CPA/PFS, MBA

Mrs. Susan C. Pokwatka, CFP®
(304) 242-6364
1341 National Road
Wheeling, WV
Firm
SP Financial Strategies, LLC
Areas of Specialization
Asset Allocation, Business Succession Planning, Comprehensive Financial Planning, Education Planning, Estate Planning, General Financial Planning, Insurance Planning
Key Considerations
Average Net Worth: $500,001 - $1,000,000

Average Income: $100,001 - $250,000

Profession: Medical/Dental Professionals

Data Provided by:
Mr. Frederick M. Hollida, CFP®
(304) 263-0891
201 E Burke St
Martinsburg, WV
Firm
CoxHollidaPrice LLP
Areas of Specialization
Business Succession Planning, Charitable Giving, Comprehensive Financial Planning, Estate Planning, Insurance Planning, Investment Management, Long-Term Care

Data Provided by:
Mr. Lance D. Koury, CFP®
(304) 472-8483
3 E Main St
Buckhannon, WV
Firm
Ameriprise Financial Services
Areas of Specialization
Estate Planning
Key Considerations
Average Net Worth: $250,001 - $500,000

Average Income: $50,001 - $100,000

Profession: Not Applicable

Data Provided by:
Archibald Hoxton
Hoxton Financial, Inc.
(304) 876-2619
8530 Shepherdstown Pike
Shepherdstown, WV
Expertises
Retirement Plan Investment Advice, Ongoing Investment Management, Estate & Generational Planning Issues, Advising Medical Professionals, High Net Worth Client Needs
Certifications
NAPFA Registered Financial Advisor, AAMS, AIF, CFP®

Mr. Jan Michael Yabs, CFP®
(740) 461-4251
2207 Market St
Wheeling, WV
Firm
Lpl Financial Corporation
Areas of Specialization
Asset Allocation, Comprehensive Financial Planning, Education Planning, Estate Planning, Insurance Planning, Investment Management, Long-Term Care
Key Considerations
Average Net Worth: $500,001 - $1,000,000

Average Income: $50,001 - $100,000



Data Provided by:
Nikolas A Kamarados, CFP®
(304) 748-3156
929 Main Street
Follansbee, WV
Firm
Prudential Financial

Data Provided by:
David M. Patterson, CFP®
(304) 623-6060
117 South 4th Street
Clarksburg, WV
Firm
Ameriprise Financial Services, Inc.
Areas of Specialization
Asset Allocation, Comprehensive Financial Planning, Employee and Employer Plan Benefits, Estate Planning, Insurance Planning, Investment Management, Investment Planning
Key Considerations
Average Net Worth: Not Applicable

Average Income: Not Applicable

Profession: Not Applicable

Data Provided by:
Brandon Michael Cline, CFP®
(304) 733-0011
PO Box 207
Barboursville, WV
Firm
Northwestern Mutual®
Areas of Specialization
Business Succession Planning, Comprehensive Financial Planning, Estate Planning, Insurance Planning, Investment Management, Retirement Planning, Special Needs Planning
Key Considerations
Average Net Worth: $1,000,001 - $5,000,000

Average Income: $100,001 - $250,000

Profession: Medical/Dental Professionals

Data Provided by:
Data Provided by:

Beware of the Seller Finance Trap

BEWARE OF THE SELLER FINANCE TRAP
Sat 08/15/09 08:48:07 pm
by Frank Rolfe

There are few things more attractive about the mobile home park business than seller financing. Non-recourse seller financing allows the buyer to escape the hassle and scrutiny of bank lending, while at the same time offering some degree of insurance against fraud (you have not yet paid the seller in full), the ability to give the park back and walk clean in the event of catastrophe, and often includes a below-market interest rate and longer loan term.  

That being said, there is a trap often used by sellers that is baited with seller financing, and it is important to always be aware of, and stay clear of, this danger. 

The trap begins with a seller who is having trouble finding a buyer. Maybe the park’s vacancy is too high, maybe the location is too rural or in obvious decline. Whatever the cause, the seller can either sit on the park for an eternity, or find a creative way to attract a buyer. And what can be more attractive to a buyer than an easy to qualify, below market interest rate loan. 

Of course, there’s nothing wrong with a below-interest rate seller note. But not when it is used as a trap. And many times, that’s exactly what is being set. 

You see, the seller knows that the park will never hold up to the scrutiny of a bank – the appraisal, the independent review of the numbers, even the negative logic of the loan officer. To keep you from finding out that the park is overpriced, Do the Search or in a bad neighborhood, or basically completely unable to be financed, the seller offers to carry the loan and cuts the bank out of the loop day one. That’s the first leg of the trap.

The second part of the trap is to bait the deal with a super low interest rate to make the park look like it is a profitable investment, even though it could never carry a regular bank debt load of the same size. If a park is a 4% cap, then what better way to disguise the poor performance than with a 2% interest rate on the mortgage? The seller is effectively cooking the books with the buyer’s blessing. When you accept a cash-on-cash return that is spiked by ridiculously low interest rates, then you may be getting into trouble.

The final part of the seller trap is to offer only a short loan term, maybe two to five years, and the below-market interest rate for only the first year or so. What this does is to put the buyer in a negative cash- flow situation almost immediately, and force the round of bank loan requests that normally end in nothing but rejection. Faced with the loan coming due, and no bank loan prospects, the buyer often gives the park back to the seller, less his 20% down payment. There are sellers out there who have sold the same park two or three times under this framework, garnering 60% of their purchase price in down payments, and still owning the park. 

So how do you avoid ...

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