Selling Financing at a LOSS?

[Jennifer Y. Park]

Hello BP community!

Has anyone had experience with wiggling out of a bad situation? I'm a part of partnership that attempted to do a flip in Fl, but due to market conditions, bad contractors and multiple change orders, etc....looks like we'll be selling at a loss. 

Only way out of it is to seller finance it and make some money at least on the lending side of things. Since we're a LLC selling, this will have to be a 30 year term, no balloon.

Anyone have experience on how to vet the credibility of the buyer? Does this happen before or after going into contract? 

And does anyone know if there's any tax we would pay, since we're selling at a loss? Or at least offset the tax we would have to pay on the interest we make from the loan?