The
MANUFACTURED HOUSING GLOBAL NETWORK
Home     Privacy & Security     Contact Us    
 
What do you want to know about manufactured housing?
Manufactured Housing Web Search
Home Search     Forum Search     Business Search    


Financing   Buy A Home Sell A Home Repair & Renovation Free Classifieds   Forums Books Insurance

Financial Consultants Brattleboro VT

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. Joseph E. Little, CFP®
(802) 257-7766
57 Western Ave.
Brattleboro, VT
Firm
Park Place Financial Advisors
Areas of Specialization
Asset Allocation, Comprehensive Financial Planning, Education Planning, Investment Management, Retirement Planning, Social Security Planning, Socially Responsible Investments

Data Provided by:
Ms. Kelli J. Warriner Crego, CFP®
(802) 257-7766
57 Western Ave
Brattleboro, VT
Firm
Park Place Financial Advisors

Data Provided by:
Travis C Shine, CFP®
(802) 257-5500
114 Main Street
Brattleboro, VT
Firm
Ameriprise Financial

Data Provided by:
Mr. Jeffrey D. Rubin, CFP®
(603) 357-2707
85 Washington St
Keene, NH
Firm
IPIC Inc

Data Provided by:
Mr. Jedediah D Liebert, CFP®
(603) 357-6300
196 Washington St
Keene, NH
Firm
Commonwealth Financial Network

Data Provided by:
Mr. Scott Dana Gordon-Macey, CFP®
(802) 254-7756
441 West River Road
Brattleboro, VT
Firm
MetLife
Areas of Specialization
Asset Allocation, Business Succession Planning, Comprehensive Financial Planning, Divorce Issues, Education Planning, Elder Care, Employee and Employer Plan Benefits
Key Considerations
Average Net Worth: $250,001 - $500,000

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

Profession: Not Applicable

Data Provided by:
Michelle A Spaziani, Financial Advisor, CFP®
1063 Western Ave
West Brattleboro, VT
Firm
Wells Fargo Advisors, LLC
Areas of Specialization
Asset Allocation, Charitable Giving, Divorce Issues, Education Planning, Employee and Employer Plan Benefits, Government and Military, Healthcare Planning
Key Considerations
Average Net Worth: $250,001 - $500,000



Data Provided by:
Mr. Bruce P. Mullen, CFP®
(802) 464-8998
PO Box 400
Wilmington, VT
Firm
Mullen Financial Strategies
Areas of Specialization
Investment Management
Key Considerations
Average Net Worth: $250,001 - $500,000

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

Profession: Not Applicable

Data Provided by:
Mr. Donald T. Ladd, CFP®
(603) 357-1280
82 Washington St
Keene, NH
Firm
Ameriprise Financial
Areas of Specialization
Business Succession Planning, Charitable Giving, Comprehensive Financial Planning, Estate Planning, Intergenerational Planning, Investment Management, Retirement Income Management

Data Provided by:
Mr. Michael J. Rafferty, CFP®
(603) 352-0863
255 West St
Keene, NH
Firm
The NH Trust Co

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 ...

Click here to read the rest of the article from mobilehome.com


© Copyright 2008 Express Network Solutions
Manufactured Housing Global Network

Page Cached @ Tuesday, 18th January, 2011 @ 02:00am

Served by checkov .xpr.com
@ 02:01:59