Let me apologize for the long post you are about to read. I was given a call by someone looking to unload a home. Met with the individual (Mr A) yesterday and here is the situation.
Mr A is 1600 behind on his land contract and was taken to court by Mr B. The courts decision was that Mr A must pay $800 by this coming Wednesday and another $800 within the next 2 weeks or he forfeits the land contract & loses everything.
Mr A wants me to pay him 2k and he will sign over his land contract to me. Being that the $1600 is due to Mr B NOW and I would have to pay that first, Mr A said that I can pay him his 2k at a later date.
First I need to know if it is even legal for Mr A to assign his land contract to me and allow me to take over the payments? I asked him if Mr B knows about this deal and Mr B does not which obviously concerns me but I can understand where MR A is coming from because he stands to lose all he has paid into the contract and then Mr B has just made 1 years worth of profit and can start the land contract all over with another buyer.
At least this way Mr A gets some money back and I get a home on a discount because I would only be paying 1 years worth of a land contract @ $400/month + $1600 of back payments and 2K to Mr A.
Mr A is going to provide me with a copy of the land contract on Monday. According to him there are only 12 months of payments plus the past due $1600 remaining. Mr B has been paying the taxes he says (I would need to verify this for myself).
Like I mentioned, $800 is due to Mr B by this Wednesday so due to the short time frame I highly doubt I can even make this deal happen "IF" it is legal because I would want to get a lawyer to make sure my interest is protected.
I know in business you have be able to make decisions quickly and execute even faster but I dont want to put myself or my business in a bad situation. A part of me is questioning myself with "am I just being scared and lack the confidence needed to succeed or am I being smart and cautious".
All questions, comments, concerns, and advice is welcomed. Thanks for being an audience.
No, Mr. A can not assign a land contract, an installment contract, he can sell the property and pay Mr. B off. The only way to assume the land contract is with the consent of Mr. B. Any financing contract may not be assigned by the maker or borrower without the consent of the lender. Need to work out a purchase from Mr. A or get with Mr. B, who may or may not want to sell to you after he takes possession of the home. Good luck:)
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