owner financing experiences

[azkid]

Does anyone have insight about what to careful about in owner financing from the sellers side? I'm exploring selling a store and it seems like everyone is asking me to finance a sizeable amount - I've turned down all offers of less than 50% down (which is over $100K in this case). I would get a credit bureau of the buyer of course, but I was thinking of requiring lien on some property or to become a listed officer in the acquiring corporation or something like that. I've heard it's extremely difficult to get your business back if a person doesn't make payments, etc. I'm also still on the lease after assignment and if the person never paid and the equipment disappeared or was nonworking, I'd have to come up with the rent somehow..

[bodman]

My brother in law is a CPA for the past 37 years and he said all of his clients that held a note lost out. do not do it . He repeats do not do it. My wife was a financial planner and she had 2 clients that sold their business and got screwed . So when I sold my business last year I took less but got cash. I sleep well at nite, bodman

[petefritz]

I bought several mats with 50% held by the owner, and sold business with the same terms, I always paid, and always got paid. Know the buyer, and get his financial statement. 'Sell to a bum and good luck. I did give a 2nd on real estate I owned on my last deal for the business loan. Ask, and you might recieve. I think partly it depends on who you are dealing withj, how well the busines really is, and how risk adverese the parties are. Buyers like to peg the businees loan to to business to keep the seller honest.

[fishmanz]

The seller is holding a note on my mat building but the note and mortgage is on another property I own. This gives the seller more security. If you hold a note for the buissness, have it be on his personal home. That will keep him paying. Be sure he has the equity to cover it and be sure to file the mortgage on the public records so you are in second position.

Another safty measure you can take is to give him the deed at closing but have him also sign a quick claim deed back to you and keep it in escrow with your attorney.

If he didn't pay, in theory you could get your mat back and forclose on his house too. You wouldn't wind up with his house. His mortgage company is in first position and would go to the auction and hold up their paper,pay you and take his house back from him.

[hotwash]

just put it in the terms that if he is two months behind or the store condition is very poor(machine out, dirty ect)you take over the store no questions asked and no refunds. and have a good real estate attorney. it all depends how bad you want to sell it

[galaga]

Bank funancing for business only is not so easy.That is why buyer ask owner funancing.I know people got bank financing but they put their house as parts of finance deal.
I bought 3 out of 4 stores ower financing,I was lucky,the sellers want me to finance since they all retired,need fixed income and I have been in business for a while.
Get to know your buyer is the key,if they can come out 30-50% cash ,you don't need the cash right away,it is not too bad way to sell store.
You know your income,check if the buyer owe you money,will they still have cash flow after the payment.If not,why do they even buy it?
Too many buyers like the cash business but no cash to buy it,like the business ,don't like the work so you have to know your buyer.
This is almost same for all business,a lot people want to get in arcade game business with me,think they just be a "game tester" play game all day ,when I told them they have to spend their time wire game together,none of them stay.