Official Carleton H. Sheets^® Website

The only question and concern i have about carrying a second note is if they default and foreclosure is started, since the bank has the most interestin the property how are you going to get your note paid just a thought.






SEMPER FI AND CARRY ON

That's a great suggestion! I read further down about BTO's concern, any advice there?
MLDJohnson

Your best bet would to maintain control of the monthly payments to the mortgage company. I recently made the mistake of allowing my brother to make the payments on the debt service directly as he purchased the property. A "novice" approach is to be expected so the experience gained is the most valuable commodity here. no tax bills were paid, the insurance lapsed, no water bills paid, 5 late mortgage payments, going on 6, and a whole lot of phone calls from the mortgage company. I cannot refinance due to the late payments.
So my advice would be to keep collecting the monthly payments as if you were still renting to them. As far as they are concerned, you are the mortgage company.

Solid advice from the unfortunate vantage point of personal experience. Thanks for allowing us the benefit of learning from your mistake.

Lee

Your welcome!
What I think I need to learn now, is the forclosure process from a seller financed point of view. Is it as simple as contacting my real estate attorney? Having just started all of this just a couple of years ago, I wasn't sure if I would ever need to know that, but I guess I do.
He will not walk away from the property and is not even keeping up appearances with the mortgage broker working with us on the final sale of this property. To give you an example of how this isn't working, he has been "supposedly" working on this purchase since October 2006. He also refuses to study the course, which makes this situation even more difficult for me because I simply am not able to connect with him enough to resolve this. He may seem to me to be too "proud" to think of the many ways that I can help. As you may know, this info led me to purchase that home in the first place, so standing behind this material isn't that hard at all.
I can only gain insight from this. Taking any sort of effort to vilify the financial debacle I find myself in however, would only detract from the positive persona I get from studying and incorporating more detail into my goals.
From this mess I continue learning and find It's in my best interest to create a mortgage account. I will knowingly and aggressively become less dependant on the future rental payments in order for my business to survive. I will pay a month in advance to maintain an appropriate distance from the late payment nightmare. I will pre-qualify my future opportunities to seller finance better and with more practical experience to share.

Hi cnyinvestor,
Tough situation you have there, especially the issue of dealing with a family member. One idea you might consider is since you have an interest in the property is to see if they will tack his late payments and all on the end of the mortgage and refinance. Set up payments through an escrow company who will take care of the collections end of it and he may take it more seriously. An idea for future note, if you bought a house for resale, you might consider holding the entire note yourself and filing a 'Quit Claim Deed' with an escrow company. That way if the conditions of the Quit Claim Deed aren't met (you could stipulate 3 missed payments) then the property is immediately deeded back to you by the escrow company by them simply filing the Quit Claim Deed. You would have immediate legal possession back and forego the hassle and expense of foreclosure proceedings and also have the property back to resell. From what I've read, that Quit Claim Deed is a powerful small piece of paper. Also, if you sold on a Lease Option you could have the same terms in it and if not complied with, just boot him out and resell. Hope that spurs an idea or two that you could try.
Sam & Michele