Being The Note Holder For Your Property
If you’re going to hold a note, you’ll want to consider what the structure of the note will be like, i.e., how long of a term you’re willing to offer. Of course, you should have your attorney assisting with the legal language of the note and to make sure it is in compliance with any laws. Some of the basic terms of a note include, debt amount, interest rate, term of note, a personal guarantee from the buyer, and any special conditions that are relevant. Planning ahead here allows you to get more aggressive with the buyer down the line on pricing, even in a down market.
Still, you’ll want to consider how long you’re willing to stick around as the note holder. This includes any municipal hurdles that come along with it. If you’re in a place that has notification requirements, the tenants may have the right of first refusal to buy your park. The state or municipality may require a park owner to provide a three to six month notification before attempting to sell, and even longer if it’s to a developer.
The MHP Expert
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