Holding a note on a sale

[Duanne Moeller]

We have an offer for our asking price on a small apartment building we own. However, the offer is 70% cash and the buyer wants us to hold a note for the remaining 30%. What do we need to consider as we evaluate holding a note? Any suggestions on how to best structure it? Thanks for any advice!

[Rich Baer]

@Duanne Moeller

      If someone is putting 70% cash down and you don't need that 30% back right now, in my opinion, there is nothing to consider. Do it. If you hold the note and they don't pay you, take it to foreclosure and get your money that way. Or you can easily sell the note to an Investor. I buy notes like this frequently from holders who want to cash out. You are in the driver's seat. As far as structuring the mortgage, talk to your Buyer and see what he would be comfortable doing in terms of rate and years. 

     Rich Baer, Esq.