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  1. #1
    SitePoint Zealot neoenvision's Avatar
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    Site Purchase Financing ? Help plz

    I got this customer who wants to buy my site, but he might not have the money I ask for, and asked if I'm willing to hold a finance.

    So I said he has to pay a 50% down payment

    My question is, what should I do to guarantee that he will finish the rest of the payments after he receives ownership of the website.
    Myspace Codes
    Terry J. Z.

  2. #2
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    At the very least, get a contract signed.

  3. #3
    SitePoint Wizard gold trophysilver trophybronze trophy dc dalton's Avatar
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    Funny I just sold my design company under the exact same circumstances. Here's what I did to try to protect myself.

    1. MAJOR contract approved by a lawyer. It lays out exactly what, why, when and how.

    2. 50% deposit

    3. I retain ownership of the domain and access to the site until the final payment is made. This is somewhat easier because I own the hosting company the site is on. But if YOU control the domain they cannot change the nameservers to another host.

    4. I limited the time to make the final payment to 6 months

    Hope this helps

  4. #4
    SitePoint Zealot neoenvision's Avatar
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    Thanks , that help alot

    Also, is it necessary to file tax ? since what I'm selling is just a website
    Myspace Codes
    Terry J. Z.

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    yes.... any and all forms of income you have to claim on taxes.

    A person can mess the business up and then end up not paying the other half.... Make sure that no matter what happens you can take the claim to court and get the full amount of $$$ even if that business fails. Make him put his *** on the line.

  6. #6
    SitePoint Wizard gold trophysilver trophybronze trophy dc dalton's Avatar
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    Quote Originally Posted by neoenvision
    Also, is it necessary to file tax ? since what I'm selling is just a website
    If you are in the US you sure do! Profit (and income) is all taxable.

    If you are a business you can deduct all the costs of the site etc but the rest freaking Uncle SLAM wants a piece of!

  7. #7
    SitePoint Zealot neoenvision's Avatar
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    Quote Originally Posted by dc dalton
    If you are in the US you sure do! Profit (and income) is all taxable.

    If you are a business you can deduct all the costs of the site etc but the rest freaking Uncle SLAM wants a piece of!

    But in what way they're gonna say this is income/profit?

    What if I say it's just someone giving me money, and I'm happy I give him my site as a return lol

    I shouldn't have to file tax if my dad deposits 1 million into my bank account, is that correct or am I wrong?
    Myspace Codes
    Terry J. Z.

  8. #8
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    Quote Originally Posted by neoenvision
    What if I say it's just someone giving me money, and I'm happy I give him my site as a return lol
    The contract you need for this says otherwise. If you want to try to cheat the system and give a gift for a gift, you're not going to have the law on your side when he fails to "gift" you the other half of the payment.

  9. #9
    SitePoint Zealot neoenvision's Avatar
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    Quote Originally Posted by Dan Grossman
    The contract you need for this says otherwise. If you want to try to cheat the system and give a gift for a gift, you're not going to have the law on your side when he fails to "gift" you the other half of the payment.
    that's true, haha

    alright guys, thanks for all the advices
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    Terry J. Z.

  10. #10
    SitePoint Wizard gold trophysilver trophybronze trophy dc dalton's Avatar
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    Quote Originally Posted by neoenvision
    But in what way they're gonna say this is income/profit?

    What if I say it's just someone giving me money, and I'm happy I give him my site as a return lol

    I shouldn't have to file tax if my dad deposits 1 million into my bank account, is that correct or am I wrong?

    The IRS has MANY ways to show you made income, remember the burdon of proof that it wasnt is ON YOU!

    Trust me when I say Ive seen better folks than you get screwed over royally by the IRS. When they look at your accounts and ask "where did this money come from" you had BETTER have some darn good answers! You want to chance it?

  11. #11
    SitePoint Wizard johntabita's Avatar
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    What you're doing is no different than anyone selling a business. My dad sold his for a certain amount down and the remainder in payment over time. What you are essentially doing there is holding a note for payments plus interest. The length, terms, interest, etc. are up to you and the buyer to negotiote.

    Quote Originally Posted by krohnathlonman
    A person can mess the business up and then end up not paying the other half.... Make sure that no matter what happens you can take the claim to court and get the full amount of $$$ even if that business fails. Make him put his *** on the line.
    That's exactly what happened to my dad. His recourse was to repossess all of the equipment and resell it (for pennies on the dollar compared to what was owed, I might add). Taking a person to court is one thing, but getting blood out of a turnip is another. If you can get him to be personally liable, you'll have a better chance to collect, even if you must garnish his wages once he has to find a job. If he's incorported, and your contact is with the corporation and not him personally, it may be difficult to collect if his corportaion has no real assets. Bottom line, you want some tangible asset as collateral that you can take possession of or put a lien on if he defaults.

  12. #12
    Not now, I'm kinda busy. pdxi's Avatar
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    "I am not a business broker", but I think it would make sense for this guy to take out a loan from a financial institution.

    Just for the sake of my education, is this even a viable option in this scenario?
    Jeffrey Hunt, freelance PHP & MySQL developer
    Resume: http://www.jeffreyhunt.org/resume/

  13. #13
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    Quote Originally Posted by neoenvision
    I shouldn't have to file tax if my dad deposits 1 million into my bank account, is that correct or am I wrong?
    Currently the "gifting" amount is set at $11k a year without paying any taxes. Neo, you do NOT want to try and hide income from the IRS. Last year I was audited on some capital gains I had on some stock sales. Somehow, they lost my 1099D form attachment I had filed 3-yrs ago -- yes, 3 years later they contacted me on this issue. The worst part was I received a letter that said I owed $1.8m in taxes -- which was totally wrong and took 8-months to resolve. From my personal experience dealing with the IRS, it is a total pain in the a**. I can't imagine what it would be like if one was caught not reporting income.

    Btw, is this regarding the drukencat site? I would be very careful in taking just 50%. That isn't exactly small change. If he does not pay it can be a huge headache and it is not that easy to get your money back. Just my 2-cents from experience.

  14. #14
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    if the guys credit isn't good enough to go into the bank and walk out with a cashiers check for you his credit shouldn't be good enough for you.....

    If the bank won't trust him with an unsecured loan why should you?


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