Seller financing flies the chicken coop| Note holding gotchas

9 Replies

Hello everyone,

Completed my first seller financing deal. Neighbors are telling me that the new owners have a chicken coup that could cost an $800 fine (neighbors paid the price last year). Neighbors explained their experience to the new owners.

I would hate for the new owners to get a fine and possibly affecting their ability to make their monthly note payments.

Should I do something, what would you do? Nothing in the sales contract about livestock...

What should I watch out for as a note holder?

Thank you,

I guess I would look at it from the perspective of a large lending company. Is Wells Fargo going to stop by and tell them to stop having chickens? If the answer is yes, they I would say do it. If the answer is no, then I would say let it be. It is not your responsibility to manage their lives or their finances. If they want to pay a bunch of fines then that is their choice. It looks like they have already been warned by the neighbors. 

You are going to stress too much to be able to do many more deals if you are worrying about every little detail of the new owner's lives. I would sit back and collect the checks like a mortgage holder is supposed to. 

@Luke H. I wouldn't worry about anything unless I stopped getting my note checks. Let them worry about the chickens. If they don't have the money because of fines, maybe they can pay you with fresh eggs?

@Dave Passey - spoken like a true business man. I'm off to my next deal. Thank you for your perspective 

:)

Agree with above - you are the lender, let them be the owner.   That said, we have a number of borrowers we've sold homes to with seller financing.  We do coach the ones who have not owned a home before about little things and they sometimes ask us questions but we are mostly hands off...

Should they now protest the property taxes?  It is something the owner has an option to do here in Houston, Tx. I normally do this, but since they are the new owners I wasn't sure. Thanks

Originally posted by @Luke H. :

Should they now protest the property taxes?  It is something the owner has an option to do here in Houston, Tx. I normally do this, but since they are the new owners I wasn't sure. Thanks

I think in states were you can protest the taxs everyone should do that..  

Originally posted by @Jay Hinrichs :
Originally posted by @Luke H.:

Should they now protest the property taxes?  It is something the owner has an option to do here in Houston, Tx. I normally do this, but since they are the new owners I wasn't sure. Thanks

I think in states were you can protest the taxs everyone should do that..  

 Sure, they should, but again, the note holder doesn't need to tell the borrower to do that

Great advice from all, though always remember, its NOT a rental...

Another way to think about it is what does a bank do (or not do) when they give you a mortgage.   If they don't do it as the lender, you probably don't need to it as a seller financing lender...

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