re: Bond for deed - bad idea?

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stout

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I have done a few bond for deeds. The thing I find around here is there are people who make good money, like offshore or plant workers, but their credit is screwed because of a divorce. They usually have enough cash downpayment to make it worth it and understand they will have to pay some higher interest. I have a few still paying and have had a few refinance once they could and pay me off. I also had one I had to take back and that wasn't cheap.

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If you write the contracts and agreements the right way the down payment and the first and last month's payment/deposit should be structured to help you cover any costs if you went through and planned for the worst case scenario before going through with it.

The thing is that bond for deed is incredibly one-sided. It's designed for an underbanked client, typically like you said a divorcee who can clear 6 figures that's proven time on the job working turn-arounds in the plant at 80 hours a week from December to April and steady time on the gig.

You just have to use the wording and terms to sharpen the teeth of the agreement up enough so that you come out even steven even in a situation where they walk away. Typically I see a lot of guys who do what you do simply take that first/last deposit and stick it in an account dedicated to that home. Like a contingency/emergency fund in case they walk away. Their up front comes from the down payment and then their milk money comes from subsequent monthly payments.