My father owned a couple houses in Portsmouth. One reminded me of a large two story frame house in which I had once lived in Waco, and the other reminded me of a garage apartment I had also lived in for a while in Waco. People lived in both houses and were supposed to be paying $150 a month per house. The houses were in disrepair and I thought the larger house could be fixed up so even more people could be living in it.
My father had borrowed $14,000 on the houses but had not yet received all the money. He now wanted to sell me the houses and transfer the loan to me. I considered doing it and began explaining to him that in order for us to consummate the transaction, the bank would have to execute a novation. I explained that "novation" was a legal word and that if he transferred the loan to me without a novation and I later defaulted on the loan then he would later be liable for paying off the debt. If there was a novation, then only I would be liable.
He did not seem to care whether there was a novation. He simply wanted to go ahead and transfer the houses to me. I had the feeling that part of the reason he wanted to transfer the property was so I would have to stay in Portsmouth and take care of it; he wanted me there.
Steve Buckner showed up and I explained the transaction to him.
Finally, my father and I went to the bank. I already owed the bank $296. My father was so anxious to complete the transaction that he wrote out a check to the bank for the $296. Then, without a novation, he signed the property over to me. Suddenly, I was the new owner.
I figured it was not a bad deal. Each house had only cost $7,000. $150 a month rent was being collected. I might even move into the big house myself and thus save paying rent. I would not do any more repair work than was absolutely necessary. After a few months, I might have things in good enough order to leave Portsmouth anyway.
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