Seller-Financed Deal Gone Bad — Need Advice and Legal Help Support

[Matthew Raby]

Hey BP community,

I’m currently in the middle of a serious situation with a seller-financed deal gone completely sideways. The buyers stopped paying, secretly turned the property into an Airbnb without my knowledge, and eventually defaulted — leaving me with a huge unpaid balance, property damage, and a legal mess trying to remove them.

Even worse, the family renting the home through Airbnb was completely unaware and now caught in the middle. I’ve signed a legal lease with them to protect their housing, but I’m still stuck pursuing the original buyers for breach of contract, trespassing, and damages.

At this point:

• I’ve paid a $5,000 legal retainer

• The buyers owe over $18,000 in missed payments

• Damages include a kicked-in door, scratched interior doors from pets, damaged siding, and HVAC tampering

• And now they’ve taken up “residency” in the basement when the original buyers tried to call the cops on the ones living in the property due to not receiving payments from AirBnB anymore (because they are paying me directly). So they are squatting in the basement even though they have never lived there.

I’m moving forward with legal action, but I’m sharing here to ask:

• Has anyone dealt with something similar under a Contract for Deed?

• Any advice on how to frame damages and enforce against unauthorized occupancy?

• How did your legal process play out if you couldn’t recover funds from the other party?

Appreciate any insight or support from those who’ve been through a similar nightmare.

Thanks,

Matthew

[Patrick Roberts]

Asking for charitable donations to offset the losses of a for-profit business venture gone bad. Wow. 

Lawyer time. Unless you have a collateral assignment of leases and rents or a similar clause in the CFD or similar legal instrument, you might be opening a can of worms by signing a lease and taking lease payments from the new tenant. Your buyer could very well have possession of these rights and the property under the agreement, and you may not have lawful standing to sign a lease for use of the property, nor any right to the lease payments. You have to foreclose and follow the legal process for your state. Find a reputable creditor's rights attorney. Biggerpockets and/or reddit wont cut it.