Question about selling van.

I'm selling one of my van and one of my local competitor which also my friend is asking if he can make payments on it, my wife says no, I'm hesitant myself too, but I asked him how much down can he do and how long of payment plan, he said he's going to email me his proposal.

I can type an agreement listing all kinds of different scenario just in case if he can't make payments anymore and such, but I want to hear from you guys, have you done this before ? If yes how do you do it ?

I think the only way I'm willing to do this is if the payment plan is no longer than 6 - 12 months and substantial down payments, and sign the agreement in front of a notary ?

On the surface, I would side with your wife.  As Shakespeare said, "Neither a lender nor borrower be" and unless you can afford to get screwed in the deal, I wouldn't suggest it.

The fact that you are friends tells me that you should not do it.  Nothing will ruin a friendship faster than selling them a used vehicle.  Six months down the road, you will be blamed for every medical issue and get a dozen calls every week asking you how to fix something.

I would not do it!

For reasons already mentioned.

The van only got 54k miles and the TM got 5k+ hours, both have no problems whatsoever, I would disclose any issues prior if any, there is none now though and I will make sure that any future issues will not be an issue between us.

I am concern about prompt payments and the process of repossession if the need ever arises, it can be very costly, plus the friendship will end for sure.

How hard is it to get collateral loans from the bank ? Since the price will be a lot higher than the van price due to the machine and reels and Chem rack included in the sale.

The problem with seeking a loan on a used cleaning van is that a bank will rarely consider the machine in the equation. So, the van would have to hold a loan value greater than the loan amount.

If you have a good relationship with the bank and have excellent credit, they might be willing to take the risk, but it is getting rare these days unless you can show them the actual value of the machine and maybe consider seeking a separate loan for the machine and van.

That is what I did for my box truck and TNT and for that old van and El Diablo at one time. One loan for the vehicle and one for the machine.

Im like you DP...I see a possibility. First you should mention what percentage he can put down so we can know if he will have risk too...if he puts a good amount down he will not want to default....then like you mention...over 12 months the remainder should be paid. Does this guy have a running business? if so, how long has he been running? if you do this, dont cut a deal....be better than a bank but dont give it away.

Im about 70/30 on these deals....My family had pawn shops growing up and my blood says loan! lol

Just go with "your" gut.

Make sure that you have a lean on the van and equipment up front. Just like a dealer.

Devon makes a strong point in that you can probably make a buck off the deal. My big concern is the friendship involved surviving.

I sold a car 3 years ago to a friend of 15 years. He just divorced and really needed a car. He was broke and so I agreed to accept monthly payments.

He drove the car for a week and then agreed to the terms. A month later he tells me that the brakes were bad and that the power steering was going out. He said that he couldn't afford repairs and the loan amount, so he didn't pay me.

I let it go for a month knowing that he was a good guy and believed that he would catch up. Later that month, he invited me over to show off his new big screen tv and converted basement theater.

Needless to say, we "had words" and we never associated with each other again when it was all over.

When you loan money or goods to a friend, don't be surprised if things go bad. Which reminds me, there is a co-worker who still has about a dozen of my tools that I need back.

If you're going to be a bank than you have treat him like your bank customer. The first step would be to get get a credit application and verify income with bank statements.  That will make your decision to make the loan easier. If his credit sucks and income is not stable don't make the loan.

If you decide to make the loan then the terms of that loan should not be as favorable as a bank cuz you;re not a bank you're DP the loan shark.

The term of the loan should be short, the rate should be higher, the down payment higher, with automatic withdrawal from his bank account.

Talk up front IF you do the deal...tell him your concern with the friendship and how you will hate to get Mr Banker on him but you will! also, if his credit is good...you should be fine...if its questionable he knows he needs to not mess up...if its bad...No. The amount you are dealing with will determine the design with me. If you are selling for over say $30k....better have a good deposit.....by the way, dont do a deal without him having skin in the game...when all said and dont if he defaults and isnt out a penny....thats a bad design. He needs a potential LOSS if he defaults...a contract is good too so you can take to court if need be.

If he defaults, you get to cut off his pinky. Hey, it worked for decades like that....skin and bone in the game that way.

I guess it comes down to the dude and only you know him amongst us. I have just found that people tend to screw over the ones they care for more than they do strangers when it comes to these things.

I guess they figure you wouldn't come after them since you are friend / family where a creditor will aggressively pursue them. I don't know what else it can be with people.

I think you really want to sell to this guy and knowing you, it is to help him out more than it is to make a buck, so follow your heart on this one.

Here is why you dont do it.  

A bank does this professionally and calculates all the risks,    so if he is considered not credible by any bank that could loan him...       do you really want to step in and do it yourself instead?  

answer is hell no,    if he defaults it wont be as easy as it sounds on paper to get your van back..    plus he could take the machine out and sell it off before you ever get a chance to repo.


tell him to go get his own loan, your just selling the equipment and you dont need to play banker

Okay DP....tell him to meet up with you...when he arrives, hit him hard in the shin with a baseball bat....then say, we are friends now...imagine screwing this up.

I'm a huge risk taker....Ive been burned and Ive made good money taking risk...to me it would be more about where I am financially. obviously you need a good level of trust and comfort for the deal.

I honestly did a business deal once where I made the guy buy life insurance....he asked WHY?...I said I need to be the beneficiary too....he thought about it and we did the deal. We never had to file the claim. He figured it was in case he died and left me holding the bag.....ummm okay! lol

Well IF I were to do the deal, here's how it's going to be :

1. Any down payment ( which has to be substantial, 10 k minimum ) will go towards TM and equipments like hose reels and Chem rack.

2. Lien is a MUST and I will hold on to one set of key and alarm remote.

3. If he defaulted, he can have the equipment as long as he had paid them off during the payment plan and my van's depreciation is accounted for. He needs to pay the cost to remove the equipments.

4. Notary or lawyer signing will be done.

I'm all for helping him out but I will put him on a very short leash on this deal if we come to term. At this time I'm still leaning to "no" because I'm not a risk taker and there are certain things going on in his life that concern me.

Thanks for all the inputs, really appreciate it

dont do it, even with all that its a lot easier on paper..

This guy could just up and leave and your out all the money. Sure legally he owes you, but what if you cant find him or the van. What if his credit is already destroyed and he just figures it doesnt matter at this point.

Happens all the time to banks that give car loans, someone defaults and they hide the vehicle or sell

its especially risky when a large portion of the value is in the equipment inside the van, this would be near impossible to track down.

You see some red flags already DP and you haven't even run a credit report yet. That van will be cleaning carpet in Rosarito in no time

DP...Maybe don't release the equipment as part of the deal...its a package and needs to remain in a package deal....if he defaults he should not get anything. Now, if he wants to buy the equipment outright then he should be able to buy the van pretty easy, unless you carry the note. My take would be to separate values of each and get the equipment paid off or close....the van wouldn't be that hard to find especially if he is using a business number to clean...you could call and have your carpets cleaned and he brings it right to you. What is the value of equipment in total?

You need to figure out what person you are dealing with....he can be the guy AC is talking about or the type I am talking about. Is he established? Does he have any good accounts you are aware of?

I've seen an everest 408 at 10k and I've seen them at 15k, depending on condition, mine is very well taken care of, no funny smell, so I want to say $ 12.5k is fair including all hose reels and chemical rack, installed !! Installation alone can run 1000 bucks.
Van is probably around 14k ? I'm selling as a turn key package for 25k.
His dad owned the business for 30 - 40 years and he gave it all up to him earlier last year, so the company is well established.
I can't share more details in here about the things that concern me because it involves his privacy and I have to respect that.
Him running away is probably very unlikely, but issues like late payments or non payments I wouldn't rule out and I don't think I want to deal with that.
He does great work, I've worked with him before, and for him to go out of business is also unlikely, however so far no proposal yet from his end.
I can sweeten the deal by offering my rotovac 360i for free at the end of the term if he's prompt with payments and finish the term on time

Sounds fair...also sounds a little better than I was thinking. It certainly can go south in a hurry but I think its a stable company situation. Go with your gut.

$25,000 around here would be a sure-fire sell in about a week. I don't know what they are out there, but it sounds like a very good deal.

Your buddy has to understand that he is buying money and not a machine. I think back to when I bought my Butler van and choked on the price, but over the years and 10k hours....that set-up has made me a hell of a lot more than it cost me.

If he needs that rig, he needs to do what it takes to get it and that means raising some capital or convincing a bank to back him. He is a business and needs to approach it as one instead of expecting a friend to bank-roll him and the business.

That is my final thoughts.....he needs to make it happen, not you unless this is simply about helping a friend. If that is what it is, then help the guy and keep your expectations low on being re-paid.

$10k down + $1500 a month for 12 months. Late payment fee of $50 after due date. 15 days late is default and you want the property back.

or

$10k buys the machine and equipment, then he gets a loan on the van. Even rough credit can get a loan for a vehicle. (I don't think his credit is bad, sometimes bank say you are over extended)keeping it off the records as far as the bank knows helps.

or

75 bitcoins

If he can come up with 10k down, he certainly can get a traditional loan for the other 15k couldn't he?

It has been a lot of years since my bad credit days, so I really don't know the answer for certain, but my bank can't stop trying to give me more when I stop in to pay my loan.

I have always paid half the price and borrowed the other half on all my rigs and no bank ever balked at that arrangement.

The problem is it's all speculation on my end in terms of the down payment, 10k or more is what I will need to consider any proposal seriously, I don't know if he has it or not, he took the company over last year and I know he's had nightmares with his older rig, I told him late last year that I'm selling one of my van this year and he texted me a few days ago asking if it's still for sale.
Another thing I can think of is to put in the agreement that if he defaulted, his company is mine, what do you guys think ? Is it hard to enforce legally ?
They have solid regular customers base, that I know for sure.

Do you guys work the same areas?

Yes we do.