If you are old enough, you may remember the song Bad, Bad Leroy Brown sung by Jim Croce. One of the lines from the song describes Leroy Brown as meaner than a junkyard dog. We have been using that phrase ever since to describe a nasty animal or person.
A junkyard dog of course is an animal that guards a scrapyard or junkyard. It got me thinking about the nature of these kinds of businesses. If you wanted to sell a junkyard you owned and found a buyer, would a bank be willing to finance that transaction? Probably not. So you would have to carryback the note in order to get your junkyard sold.
There are many types of property that, in the best of times, are difficult to obtain conventional financing for. Banks see the risk level or issues involved in the particular type of property as being too great for their comfort zone. So sellers and buyers work out arrangements between themselves.
But, suppose the seller really does not want to carryback the note? He wants to cash out. What options, if any, does he have?
Well, there is good news for this seller. There is a market for this seller to sell his carryback note to a professional notebuyer who is willing to assume the risk that banks are not. I have a relationship with this funding source who has a reputation for purchasing these “out of the box” property types.
So, if you have a gas station, scrapyard, church, pet cemetery, smog shop, tire shop, auto repair shop, truck parking lot, etc., you need to know a market exists for you to sell your well structured seller carryback note.
All is not lost.
