should i sell to my tenant? owner financed question

[doomsmith]

i purchased last year for 25k from a friend who had a tenant in place.  great tenant.  paying 650 month.  tenant responsible for energy bills.  im responsible for water, insurance and taxes.  i clear 500 per month assuming no repairs needed.  for the past year, no repairs have been needed.  i even have a clause in my lease, repairs under 100 are covered by tenant, over 100 i will cover.  

in any event, she wants to buy it.  she doesnt have good credit and she doesnt have any savings.  but she has an extreme Desire to make this place her home and take care of it for her son.  a lender wont touch her.

i told her i would consider something...and this is what i think...im not a numbers guy but tell me if its worth it or should i just keep it and rent.

i bought for 25k off market, the house next door sold for 60k, so 60k would be my price. i think its fair to double or 2.5 times market rate for 100% financing for a 15 year term....

60k at a rate 8% i think i calculated a total pay out roughly of 90k after all payments are made 15 years later.  

her payment is a little less then her rent now, i secure payment for the next 15 years, if she defaults i will get her money and my house back.  deed wont transfer until paid off.  in the contract, i will act as bank, and will not have any financial obligations with regards to taxes, bills, insurance, repairs....im just a bank.

this is just surface conversation, but am i on the right track?  do the numbers sound attractive?  would the numbers and only the numbers make or break your decision?

thanks

[just hanging]

didn't read it all but my friend has done it with a couple of houses and a condo.  You need a good lawyer, the place stays in his name till sold, and if so many payments are not made goes back to him

[Halfaboy]

Your problem will be to get your tenant / buyer out in case of non payment. Thai laws do not make that easy. The person living in ýour'apartment has lots of rights.

[Scuba+]

You're talking UK right? No currency mentioned. What's her job or is she on benefits? If she loses her job payments will stop.

There might be some consumer credit law you need to comply with so google that.

As she is a high risk you should make it clear in the contract what will happen if she stops paying or misses months

[worldpunter]

 " a lender wont touch her  "    , there that's your answer  . You said it yourself  . Don't do it  , my advice  with 30 plus years in  property 

[JAI DEE MAK]

9 hours ago, worldpunter said:

 " a lender wont touch her  "    , there that's your answer  . You said it yourself  . Don't do it  , my advice  with 30 plus years in  property 

+1

JDM

[Kahoy]

Never.

[Skalliwag]

I do this all the time,have two deals currently in place with purchasers and I myself have a vendor who is financing a piece of property that I am paying him.

Its a good way to get a decent rate on the equity in the property but the problem is,it's tied up for a number of years.

They tenant is in first place,so a bank can't remortgage the property so you can buy something else,or take built equity out.

If you're not thinking you will need the cash,then it's a great idea,as long as the tenant is sound.

I would take a non refundable deposit,for as much as they can afford,and it comes off the end of the term.

So if they give you 20k and the price is 60k,then when they get to 40k it's theres.

If they have nothing to put down,it's a problem.

Vendor take backs are a fantastic way for sellers to avoid some capital gains on the property,and they are a good way for purchasers to get into the market.

8% is a fantastic rate,and I think if you're comfortable with the deal,you should do it.

In our case over here,We have so many old money properties here that that's all I work on all week,is lining up old guys to buy what they have,tenant them out,give the oldies a nice large cash deposit and have them finance the rest.

I bought my flagship property this way.The old guy just didn't want to see a developer come in and knock it all down.

The first question he asked me was "was is your intention with that property"?

I said that I loved the place and I wanted it as a holding property so that if anything happened to me,my wife and son were taken care of.

That was it,it took less than five minutes to have a deal done.

I just signed Eneterprise rental Cars to a new 8 year deal and they took half of all the commercial property.

winner winner.

 

[yimyam]

as they say in Thailand Up to You :-)

 

[jorgethepussylover]

On 9/23/2017 at 20:52, Skalliwag said:

.

8% is a fantastic rate,and I think if you're comfortable with the deal,you should do it.

 

 

LOL for seller yes good rate for buyer why any person take 8% and 15 year

[Skalliwag]

2 hours ago, jorgethepussylover said:

LOL for seller yes good rate for buyer why any person take 8% and 15 year

Cause the bank won't lend them money or they Havnt got enough capital to put down?

duuuhhhhhhh.

Need anymore reason Whore hey?

[jorgethepussylover]

2 hours ago, Skalliwag said:

Cause the bank won't lend them money or they Havnt got enough capital to put down?

duuuhhhhhhh.

Need anymore reason Whore hey?

I understand finance 

8% 15 year tenant never complete term payment by finish this 2+ x original pay

better to make payment double more short term possible 6 year but i think OP want cake and eat this contrat only good one side

[Skalliwag]

2 hours ago, jorgethepussylover said:

I understand finance 

8% 15 year tenant never complete term payment by finish this 2+ x original pay

better to make payment double more short term possible 6 year but i think OP want cake and eat this contrat only good one side

Usually when you can't afford something,it's only good one side.

When you can buy it.....it good for you.When can't.....cannot be good.

you can go bank,get money,pay me.

Bank cannot give,you want me be bank,fuck you,my deal or you can suck cock,get money pay me.

you want negotiate with me?Fuck you,fuck ass get money.

You want sharky or me?

up to you.I have you want,pay me or fuck You.

 

[jorgethepussylover]

7 hours ago, Skalliwag said:

Usually when you can't afford something,it's only good one side.

 

 

okay long we both think same this deal not good to two people

[Skalliwag]

Just now, jorgethepussylover said:

okay long we both think same this deal not good to two people

Of course not......but who gives a fuck about the purchaser?

I am one and I know that going in.

[jorgethepussylover]

opkay orignal question possible should ask to us 

'is possible i can squeeze tenant finance more this offer or this maximum squeeze'

 

i think offer to bad and if goal to actual sale of apartment 0% chance if goal to collect extra rent before tenant say i not finish payment this good contract for sell

[just hanging]

Again:   My friend owns a house worth about 16 million.  Would rent for about 70 or 80K.  He made deal for 100K a month, till it was paid off with interest.  The guy is paying monthly, the house is still in my friends name, and wont be passed on till paid for.  If he missis a few months of payments he loses the deal.  A good lawyer  wrote it up and they are all happy with the deal

[losgrad]

Taxes and fire insurance covered by? 

Since the buyer has no or bad credit, this will likely end sadly for her unless she has a potential backer to see her through the end. 

Unemployment or underemployment at any time during the next 15 years... 

If you don't need the cash from a sale and it's written up by a good lawyer, you're likely going to have the property back at some point. 

It's Business. 

[Geordie59]

1 hour ago, just hanging said:

Again:   My friend owns a house worth about 16 million.  Would rent for about 70 or 80K.  He made deal for 100K a month, till it was paid off with interest.  The guy is paying monthly, the house is still in my friends name, and wont be passed on till paid for.  If he missis a few months of payments he loses the deal.  A good lawyer  wrote it up and they are all happy with the deal

Assuming no deposit was paid as you don't mention one and forgetting the interest that is a commitment for over 13 years on the part of the purchaser. A hell of a lot can change in that time in this country.

The only issue I would have with that is the faith in a good lawyer. We all know how the law can work in Thailand and it not always according to the letter.

[aussielongboat]

interesting position.

I used to lend money out all the time until I lost my nerve.

the borrowers were all quasi-friends and business acquaintances and I always had some security.

the amounts were up to A$120,000 at a time and for 1-2 year period

, Rates were about 2x the norm.

the problem is what do you do when/if they stop paying - I mean how far are you prepared to go to get your money back.

that's the bridge that I didn't want to cross anymore.

 

same for you - what do you do if she stops paying - how do you recover the possession of your property.

are you prepared to have her physically chucked out on the street and be looking over your shoulder for the rest of your life?

 

that's what it can come down to.

 

 

 

[Larssonn]

On ‎2017‎-‎09‎-‎23 at 10:45, doomsmith said:

i purchased last year for 25k from a friend who had a tenant in place.  great tenant.  paying 650 month.  tenant responsible for energy bills.  im responsible for water, insurance and taxes.  i clear 500 per month assuming no repairs needed.  for the past year, no repairs have been needed.  i even have a clause in my lease, repairs under 100 are covered by tenant, over 100 i will cover.  

in any event, she wants to buy it.  she doesnt have good credit and she doesnt have any savings.  but she has an extreme desire to make this place her home and take care of it for her son.  a lender wont touch her.

i told her i would consider something...and this is what i think...im not a numbers guy but tell me if its worth it or should i just keep it and rent.

i bought for 25k off market, the house next door sold for 60k, so 60k would be my price. i think its fair to double or 2.5 times market rate for 100% financing for a 15 year term....

60k at a rate 8% i think i calculated a total pay out roughly of 90k after all payments are made 15 years later.  

her payment is a little less then her rent now, i secure payment for the next 15 years, if she defaults i will get her money and my house back.  deed wont transfer until paid off.  in the contract, i will act as bank, and will not have any financial obligations with regards to taxes, bills, insurance, repairs....im just a bank.

this is just surface conversation, but am i on the right track?  do the numbers sound attractive?  would the numbers and only the numbers make or break your decision?

thanks

im just curious if you are aware of maximum rates by thai law ?

just with any type of loans in thailand its not a big deal but if you overcharge rates it becomes a criminal act wich isnt too wise so if you ever choose deals like this make sure paperwork are flawless .

for example people give loans at higher rates and by thai law youre only allowed to charge 1.25% if i recall correctly , just something to think about .

im NOT all sure about theese things but just crossed my mind , can never be too carefull here .