John White
Gold Member
I have bought and sold a couple of properties this way and it has worked pretty well for me. The first one I bought was the property where I went in business for myself. I am thankful to this day that the old gentleman helped me out as the bank would not touch me with a ten foot pole. Though I had a good credit report (1976) I had no down payment and had to make a living off the property from day one to pay my family bills. I had no down payment so he took a lein on a second house I owned and agreed to give me one year to sell it and pay off the down payment, plus I was to deposit a monthly payment at the bank every month in his account. (The bank controlled all of this) I sold my house within the time stated, paid the down payment, and continued for about 5 years making monthly payments in his account. Finally it was paid off. About 15 years later I had the property split and was selling part of it to a friend, under land contract also (the amout I received was enough to build a new shop on the remaining half.) He paid me monthly (13%interest at the time)Finally paid it off after about 10 years. (a good deal for him also as he didnt have money to buy it out right,) Gave me enough money for a down payment, enough to get the shell up for my new bulding and with his monthly payments, I finished it like Johnny Cash's car "one peice at a time" Finally when I went to get it deeded over to him, I found out that the bank had never contacted the original seller I bought it off of and had the lein canceled and didnt even know how to get ahold of him as almost 20 years had passed. I found out he had acctually died about 10 years previous. My worst night mare begin to appear. His heirs asked me to prove I had paid it off. I didnt have all the canceled checks from that far back. I simply said you know your dad and you know the business man he was and he would have repossed the property instantly if I missed a payment. Luckely thats all it took, they discharged the lein. My brother bought a house on land contract and paid on it for 10 years, only to have it repossed because the seller had used it for collaterial on a loan and defaulted. (I really dont think he had a good contract drawn up by a lawer).