How would you protect yourself?

[Golonzo]

Let's say you're in this situation.

You borrowed money from bank/investor to build apartments. Apartments are being built, but no sales yet. Your trying your best to get the loan paid, but no sales yet.

Worst case scenario you discover there isn't a market for those types of apartments, or the market is too small, so you wouldn’t be able to sell enough apartments to pay off the loan in time.

You worked you ass off to get to the point where the apartments are being built. How would you protect yourself in case you could pay off the loan?

 

[BassTrackerBoats]

BK 7, 11 or 13 depending on the situation.

 

[Golonzo]

BK 7, 11 or 13 depending on the situation.

Thanks, going to look up BK laws.

 

[Vapys]

Short sale the loan to another investor in the same industry.

 

[Golonzo]

Short sale the loan to another investor in the same industry.

Maybe an investor who is capable of selling the apartments.

 

[Vapys]

Maybe an investor who is capable of selling the apartments.

That shouldn't be your concern honestly.
Example... if the loan is for 500k sell it and the development for 425k.
Your in negative default for 75k but your out the headache and responsibility of 500k.

 

[Golonzo]

That shouldn't be your concern honestly.
Example... if the loan is for 500k sell it and the development for 425k.
Your in negative default for 75k but your out the headache and responsibility of 500k.

So one can protect themselves by reducing the amount of debt, or increasing the loan payment time frame using BK.

Say the default is high, around 1M , I would still have constant headaches over that.

 

[Vapys]

For 1 million I can build a 16 unit apartment building, priced at $250,000 each here in the USA.
4 million total minus 1 million loan, netting me 3 million.

You're not telling the whole story.
Did you hire Ray Charles as your architect?
Did you spend half on coke and hookers?

 

[Golonzo]

For 1 million I can build a 16 unit apartment building, priced at $250,000 each here in the USA.
4 million total minus 1 million loan, netting me 3 million.

You're not telling the whole story.
Did you hire Ray Charles as your architect?
Did you spend half on coke and hookers?

Hehe

I wish I had spent half on coke and Hookers, I would have some legendary stories and videos hehe.

Long story short, the project has around 90 apartments being constructed in a good neighborhood. It's being managed by someone who isn't business savvy. The person jumped from running a small convenience store which was barely protitable to constructing 90 apartments. It's like jumping from running a 20 page amazon affiliate site to coinbase. A completely different beast Imo.

I built a website for them which was getting some inquiries, but they did not have a sales person to deal with the inquiries.

This was three years ago, they still don't have a sales person on site. So if you were interested in buying an apartment, you would go to the site, and there wouldn't be someone who shows you around and convinces you why those apartments are better than the thousands in that neighbourhood.

I know the people behind the project so I'm looking for a ways they can protect themselves if they aren't able to pay off the loan on time.

 

[Wilson Grant Fisk]

Hehe

I wish I had spent half on coke and Hookers, I would have some legendary stories and videos hehe.

Long story short, the project has around 90 apartments being constructed in a good neighborhood. It's being managed by someone who isn't business savvy. The person jumped from running a small convenience store which was barely protitable to constructing 90 apartments. It's like jumping from running a 20 page amazon affiliate site to coinbase. A completely different beast Imo.

I built a website for them which was getting some inquiries, but they did not have a sales person to deal with the inquiries.

This was three years ago, they still don't have a sales person on site. So if you were interested in buying an apartment, you would go to the site, and there wouldn't be someone who shows you around and convinces you why those apartments are better than the thousands in that neighbourhood.

I know the people behind the project so I'm looking for a ways they can protect themselves if they aren't able to pay off the loan on time.

Why are you worried about their business? Unless they are family members or very close friends, what is your concern?
They may actually know what they are doing and there may be a reason for their behaviour.
If you poke your nose around you might attract unwanted attention to them.

 

[Vapys]

Is this a third world country/planet?

Because where I'm from "Earth" we have something called "Real estate agents".
Who work their asses off for free till they actually sell an apartment/house in which case they earn a commission.

From what you described the people involved from start to finish are incompetent.
File for bankruptcy...do the planet a favor and stick to groceries.