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Financial Consultants Moscow ID

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. Jeff Scott Bollinger, CFP®
(208) 882-4474
1420 S Blaine St
Moscow, ID
Firm
Edward Jones Investments
Areas of Specialization
Business Succession Planning, Charitable Giving, Comprehensive Financial Planning, Estate Planning, Investment Management, Investment Planning, Life Planning
Key Considerations
Average Net Worth: Not Applicable

Average Income: Not Applicable

Profession: Not Applicable

Data Provided by:
Chase Bank
(208) 882-8350
1790 W Pullman Rd
Moscow, ID
Type
Freestanding
Office Hours
Mon:9:00-6:00
Tues:9:00-6:00
Wed:9:00-6:00
Thurs:9:00-6:00
Fri:9:00-6:00
Sat:9:00-3:00
Sun:closed

US Bank - Blaine Street Office
(208) 882-4670
1314 S Blaine St
Moscow, ID
Languages
Spanish
Drive Up Hours
Mon 09:00 am to 06:00 pm
Tue 09:00 am to 06:00 pm
Wed 09:00 am to 06:00 pm
Thur 09:00 am to 06:00 pm
Fri 09:00 am to 06:00 pm
Sat 09:00 am to 03:00 pm

Wells Fargo - Moscow Eastside
(208) 883-5644
1313 S Blaine St
Moscow, ID
Type
Branch
Office Hours
Mon-Thu 09:00 AM-05:30 PM
Fri 09:00 AM-06:00 PM
Sat 09:30 AM-03:00 PM
Sun Closed

Bank of America - Pullman
(509) 334-4009
425 E Main St
Pullman, WA
Type
Banking Center
Services
Banking Center Services: Change Order, Commercial Deposits, Night Deposits, Drive Up
Outdoor ATM Services: Open 24 Hours, Braille, Accepts Deposits, Multi-Check Deposit, Drive Up
Languages
English, Spanish, Chinese, Korean, French, Russian, Portuguese
Office Hours
Monday 9-6
Tuesday 9-6
Wednesday 9-6
Thursday 9-6
Friday 9-6
Saturday 10-1
Sunday Closed
Drive Up Hours
Monday 10-6
Tuesday 10-6
Wednesday 10-6
Thursday 10-6
Friday 10-6
Saturday Closed
Sunday Closed

Jason Plemons, CFP®
(509) 332-2543
205 E Main St
Pullman, WA
Firm
Waddell & Reed
Areas of Specialization
Comprehensive Financial Planning, Divorce Issues, Education Planning, Estate Planning, Insurance Planning, Investment Management, Long-Term Care

Data Provided by:
US Bank - Moscow Office
(208) 882-2567
301 S Main
Moscow, ID
Drive Up Hours
Mon 09:00 am to 05:30 pm
Tue 09:00 am to 05:30 pm
Wed 09:00 am to 05:30 pm
Thur 09:00 am to 05:30 pm
Fri 09:00 am to 06:00 pm

Wells Fargo - Moscow
(208) 883-5640
221 S Main St
Moscow, ID
Type
Branch
Office Hours
Mon-Thu 09:00 AM-05:00 PM
Fri 09:00 AM-06:00 PM
Sat 09:30 AM-03:00 PM
Sun Closed

US Bank - Pullman Office
(509) 334-1313
301 E Main St
Pullman, WA
Drive Up Hours
Mon 09:00 am to 05:00 pm
Tue 09:00 am to 05:00 pm
Wed 09:00 am to 05:00 pm
Thur 09:00 am to 05:00 pm
Fri 09:00 am to 06:00 pm

Chase Bank
(509) 332-3561
205 N Grand Ave
Pullman, WA
Type
Freestanding
Office Hours
Mon:9:00-6:00
Tues:9:00-6:00
Wed:9:00-6:00
Thurs:9:00-6:00
Fri:9:00-6:00
Sat:9:00-3:00
Sun:closed

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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