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Started By
Message
Legal Question regarding Collateral
Posted on 11/25/14 at 2:03 pm
Posted on 11/25/14 at 2:03 pm
First off I am waiting for a return call from a lawyer I use from time to time. He is out of town and it is tough to get him this holiday week. Would appreciate some input in the meantime.
A restaurant in Virginia wants to purchase a smoker from me but wants me to finance it. The restaurant and the owner check out. I have done due dillegence with the city permit office. He has been in business for over 15 years and is a well respected home town guy.
Obviously I am still uncomfortable. Is it legal for me to secure this loan with a titled item used as collateral? Di you have to be a licensed lender to do that? It would obviously make me feel better if I can do that.
A restaurant in Virginia wants to purchase a smoker from me but wants me to finance it. The restaurant and the owner check out. I have done due dillegence with the city permit office. He has been in business for over 15 years and is a well respected home town guy.
Obviously I am still uncomfortable. Is it legal for me to secure this loan with a titled item used as collateral? Di you have to be a licensed lender to do that? It would obviously make me feel better if I can do that.
12
Posted on 11/25/14 at 2:05 pm to Ambassador
The guys been in biz for 15 years and cant afford a smoker 
Posted on 11/25/14 at 2:06 pm to Ambassador
quote:
A restaurant in Virginia wants to purchase a smoker from me but wants me to finance it.
quote:
He has been in business for over 15 years and is a well respected home town guy.
The frick kind of Mickey Mouse operation is old boy running he can't come out of pocket for a smoker?
And he's buying a smoker in VA from a dude in LA?
This seems like a craigslist scam. Is this real life?
Posted on 11/25/14 at 2:11 pm to jamboybarry
Real life. He is opening a second restaurant, a BBQ place. The smoker is not cheap and he us over budget by $15,000 and he is not through building. I have confirmed this with local officials.
He wants to drive down here next week and pay me $5000 down and finance the remaining $10000. I want to know if I can legally secure it with collateral.
He wants to drive down here next week and pay me $5000 down and finance the remaining $10000. I want to know if I can legally secure it with collateral.
Posted on 11/25/14 at 2:12 pm to Ambassador
I don't know the answer but I recall something about ucc-1
Posted on 11/25/14 at 2:13 pm to Ambassador
a $15,000 smoker?!?
Posted on 11/25/14 at 2:16 pm to Ambassador
I will not give you legal advice, but I would suggest reading your state's iteration of the Uniform Commercial Code Article 9, which deals with secured transactions and then make a decision from there if you can't wait for your lawyer.
General UCC Article 9 This is not your state's iteration, but most have enacted the UCC almost verbatim.
General UCC Article 9 This is not your state's iteration, but most have enacted the UCC almost verbatim.
Posted on 11/25/14 at 2:28 pm to Ambassador
This is foolish.
If this numbnuts can't go to a bank and make a note for $10K, I'd pass.
If this numbnuts can't go to a bank and make a note for $10K, I'd pass.
Posted on 11/25/14 at 2:29 pm to Ambassador
quote:
I want to know if I can legally secure it with collateral.
Yes you can. You don't have to be a lending institution to draw up a promissory note.
Posted on 11/25/14 at 2:37 pm to Ambassador
Disclaimer: This isn't legal advice.
If you went ahead with the deal, what's going to happen if the owner defaults? Are you going to go to Virginia and repossess the smoker? How are you going to prevent him from moving it or hiding it from you? Who is essentially borrowing money from you - the owner in his personal capacity, or a business entity with limited liability?
If you went ahead with the deal, what's going to happen if the owner defaults? Are you going to go to Virginia and repossess the smoker? How are you going to prevent him from moving it or hiding it from you? Who is essentially borrowing money from you - the owner in his personal capacity, or a business entity with limited liability?
Posted on 11/25/14 at 2:40 pm to VetteGuy
This guy is about to screw you in the as without any Vaseline. Run as far away as you can from this dummy.
Posted on 11/25/14 at 2:43 pm to Ambassador
Can we see a picture of said smoker?
Posted on 11/25/14 at 2:46 pm to dtmb
quote:
Who is essentially borrowing money from you - the owner in his personal capacity, or a business entity with limited liability?
The owner can purchase it under the business but still personally sign the note and be held liable. Happens all of the time.
Posted on 11/25/14 at 2:48 pm to dtmb
All good questions.
There is another aspect to this too. While my smoker is worth this amount it is very difficult to find somebody to pay my asking price. You can find Southern Prides that are not the quality of mine nor with the specs but will sell for $6000-$7000. They are not expensive to maintain and people are willing to get an older more worn unit.
I would probably not sell it for $7000 but the thought of potentially being able to get more is tempting.
There is another aspect to this too. While my smoker is worth this amount it is very difficult to find somebody to pay my asking price. You can find Southern Prides that are not the quality of mine nor with the specs but will sell for $6000-$7000. They are not expensive to maintain and people are willing to get an older more worn unit.
I would probably not sell it for $7000 but the thought of potentially being able to get more is tempting.
Posted on 11/25/14 at 2:52 pm to Ambassador
quote:
All good questions. There is another aspect to this too. While my smoker is worth this amount it is very difficult to find somebody to pay my asking price. You can find Southern Prides that are not the quality of mine nor with the specs but will sell for $6000-$7000. They are not expensive to maintain and people are willing to get an older more worn unit. I would probably not sell it for $7000 but the thought of potentially being able to get more is tempting.
More tempting than the desire to avoid losing 10 grand?
That discomfort you feel is your brain telling you to walk away.
At least it would be for me.
Posted on 11/25/14 at 2:55 pm to Ambassador
Your security interest, while legal if you follow the rules, isn't worth a lot given you'd have to repo in Virginia. Sounds like a PITA.
Posted on 11/25/14 at 2:56 pm to Ambassador
i do it often between individuals. i have them sign a note containing a pledge agreement, then record the title/mortgage with the dmv. where will the rig be titled? if you title it in the buyers name here, he will pay sales tax here and in his home state when he obtains a VA title.
regardless of where the transaction is recorded, you hold the paper and do the recording. you may have to collect VA tax for him and remit to VA with the act of sale. If you simply have him sign a note and then give him the title, the mortgage never gets recorded/perfected, and you end up unsecured.
regardless of where the transaction is recorded, you hold the paper and do the recording. you may have to collect VA tax for him and remit to VA with the act of sale. If you simply have him sign a note and then give him the title, the mortgage never gets recorded/perfected, and you end up unsecured.
Posted on 11/25/14 at 2:57 pm to Slingin Pickle
This is a link to the commercial site. I don't have a way to post my photo.
Southern Pride
Southern Pride
This post was edited on 11/25/14 at 3:06 pm
Posted on 11/25/14 at 3:00 pm to Ambassador
i will give you a law practice aphorism about taking on bad clients and let you apply it to your own situation.
i would rather not do the work and not get paid than do the work and not get paid.
what will your profit be when he does not pay you?
i would rather not do the work and not get paid than do the work and not get paid.
what will your profit be when he does not pay you?
Posted on 11/25/14 at 3:03 pm to Slingin Pickle
quote:
Can we see a picture of said smoker?
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