All Forum Posts by: Clyde Myers Jr

Selling my 1st position note of 22, "established with tenants", rental properties which I sold to an experienced RE investor 3 months ago on April 1st (and have received 3 timely payments in full). The buyer gave no personal guarantee as he purchased the properties under his LLC and there is also no balloon over the term of the loan. The details of my note are as follows:

1. Sales Price = $900,000
2. Down Payment to me = $95,000 (10.5%)
3. Loan Term = $805,000 balance financed over 20 years
4. Interest Rate = 10%
5. Monthly Payment Amount = $7,768.42

The properties are "park model" mobile homes on their own lots so each property is one home and one lot.

I have all of the closing docs (closed with a title company), promissory note, etc. that you may need to evaluate this once in a lifetime deal, just ask and I will get them emailed over to you.

What's more is that I will also give you my personal guarantee on this note. That may sound strange coming from the 1st position note holder but its really not because I set all of these homes up on the lots myself over the last 7 years, everything from transport, to remodels/make readies, to leasing out and I can easily step right back in with my staff and pick up where I left off. I have the infrastructure, marketing, and experience to do so.

The only reason I'm selling this note for such a good deal is because I need the capital to fund my current commercial building project that is underway.

Thank You

Yes, the buyer definitely wants the deal I've offered to him (offered it to him last night).  No, he does not have the liquidity to cash my equity portion out however he knows that it is so good of a deal that he is going to borrow the $250k to pay me.  Its actually not a bad idea because no matter what interest rate or terms he gets, the end result is that A. His payment will be about the same or even a little less if he's lucky after combining my underlying loan P&I with his new $250k loan and B. He saves hundreds of thousands over the life of the loan and on the back end.  It's a win win.

I do have reserves about how "easy" it will be for him to borrow this money.  And of course the ace up my sleeve is that I'm actually willing to knock off another 50k of my equity if that's what it takes to get the deal done and me my money.

Yes I have 1st position as it is my note.  I want to offer the guy who bought my 22 properties the opportunity for him to simply cash out my equity portion of the note which would then simply leave him with the payment on my underlying loan savings him hundreds of thousands.  The terms that I sold him the properties are as follows:

Sales price $900k

Down payment to me $95k

I financed the $805k balance at 10% interest for 20 years making his payment to me $7,768

I want my equity put of the deal so Im thinking about making him a super deal.  I'll discount the $805k balance by $150k.  He pays me the remaining equity I have of $250k leaving my underlying 9 year remaining loan of $400k for him to simply pay the P&I on of approx. $4,400 

Should I offer him this deal?  Note buyers will take a month or more to cash me out and I need my equity like yesterday.

Thanks

Currently sitting on a fairly big multi-property note with an underlying loan.  I want to simply cash out my equity and so my question is why can I not take my equity portion payoff from the buyer and keep my underlying loan?  It will save my buyer hundreds of thousands over the life of the loan.  I'm considering this because I'm tired of "tire kicking" note brokers.  I want my equity so as to build my commercial building.  Thanks 

Greatly appreciated Jeffrey.  I'll look into both of those today.  Obviously, I wouldn't just sell one at a time per year so hopefully one of your two mentioned strategies will work otherwise I'll just keep them as monthly/weekly rental units.

Got through with County permitting EXCEPT for one lonely document referred to as "Certificate of Compliance".  From what I understand, the county engineers review my plans and decide whether or not I need to plat.  

On another note, I have another idea that I may try.  I was considering doing owner financing on these 14 park models as they will be permanent for the most part.  I would have two forms of income at that point, one being the note and the other lot rent.  Obviously the lot rent would continue until.......whenever whereas the note would end once paid off.  And then of course my original idea is to just keep the park models as park owned rentals (whether it be short term or long term).  I really cant decide and am not knowledgeable enough to run all of the various scenarios.

However, I think I could sell them owner finance for $30k due to their location and the fact that they are all fairly new thus creating a note and then be able to charge say $200 per month in lot rent on top of that.

Any thoughts or ideas?  I guess that I would even consider selling it after I build it out.

Thanks Everyone, Clyde 

I'm embarrassed to show my ignorance here but I am shocked that the TREC lease doesn't have more to do with NNN. Like I said before, I'm just the owner and like other absent owners with "other" full time jobs, my primary focus is to simply find tenants not having time to further investigate the intricacies surrounding the lease.

I really don't know much about commercial contracts.  I do residential primarily and created my own lease over several years and then had it proofed by my atourney.

Asking $8 sq. Ft. And doing NNN for sure this time. Basic commercial TREC lease.

**UPDATE**

Found a commercial CCIM broker with a Phd. of all things and hopefully she will be great.  She has already shown my building 3 times to prospects and is waiting to receive feedback from one who is very interested.  Thank you to everyone here who had input to aide in my success at finding a competent commercial broker.  Thank You all very much