Improving paper

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Posted by Paul_MA on June 29, 2001 at 00:59:38:

I sold a 2 family (1 fam w/inlaw) property via land contract in March, this year:

30k sale price
3k down
$2077 credit for a lot the buyer traded in (which I sold him a year earlier) as part of the purchase price

The payor established a good payment history with me on a parcel of raw land he bought from me in March of 2000. The price was $5000. He made a cash down payment of $1000 and a term of 30 months at $154.99/month. He made 9 payments on time from April through December. I recorded the date of payment, postal money order number and amount paid on a spreadsheet. I do not have proof of the down payment. I intended to keep that note.

He was currently renting his home at $400/month and paying for the land at $155/month.

He approached me in November of 2000 and asked to purchase my residence, which was for sale. We agreed on a $3000 cash down payment from his tax returns and a land contract for 15yrs at $299.12 per month. He is on the note alone. When I pulled credit, it was the worst credit I've ever seen.

The decision to sell to this poor credit recipient was based solely on the prior payment history and the fact that he had 10% down. He also traded in the vacant lot as part of the purchase price. The equity build up in the vacant lot was $2077.

So, with $5077 into the property and a land contract (landlord/tenant relationship), I accepted, knowing the credit was a flat tire.

Now instead of a monthly of $555, his 'housing' payment is $299.12, almost half. This puts him in a better position financially, which is more affordable for him.

He has been in the property since March and always pays on time.

I got to know this fellow personally. He is married with 3 children. At the time of the passing of papers, his wife was receiving some public assistance. She has since got off the 'system', and is working at the local casino. He works for an ambulance service.

This is the fourth time I put uncredit worthy people into a home of their own. I feel good about what I did. Unfortunately, the whole thing looks bad on paper.

Is there a way I can improve this note? Need help from the pro's.

Thanks and Get Well Soon!

Paul McInerney

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