| |
| |
|
Real Estate Information |
|
|
How Real Estate Investors Use Mortgage Note To Purchase Properties
Many of you may not be aware of the various ways notes can be used. The average person's understanding about notes is that people create them because they are desperate to sell a property. Nothing could be further from the truth. Real estate investors are now creating notes to finance properties they wish to buy--then selling the notes in advance--then buying the property with the proceeds--in effect, with little to no money down; of their own. Selling a property by being willing to create a note actually shows savvy on the part of the seller. Even some real estate agents view a seller's willingness to sell by owner financing as a desperate...but the real estate agent who knows better is very hard to find. Most of them are missing not only the boat, but the whole ocean! Not to demean real estate agents, but most of them have a linear kind of thinking about how to sell property and it not only limits their own income, but hinders them from being the best helper they could and ought to be to property sellers. Real estate investors and savvy property sellers bypass working with real estate agents for mainly the above mentioned reasons......not to mention the savings realized by not using real estate agents and having to pay their fee. Okay, so here's a scenario we recently worked on to give you an example: Mr. A wishes to buy Happy Trails Apartment Complex from Mr. B. The Happy Trails Apartment Complex is a 300 unit complex and is desirable when you run the income and expense calculation numbers on it. The price is $25M and the appraised value is around $29M. Mr. A envisions that if he were able to create a note for $29M and sell it to note investors at a discount, he might still be left with enough to make an offer to the seller. Confused? Okay, Mr. A approaches us with a proposed $29M note he wants to create in advance to buy Happy Trails Apartment Complex from Mr. B. We investigate the case and find that the property can service the debt. Mr. A has good enough credit and sufficient equity in other properties to pledge as collateral to satisfy our investors. All that's needed from this point is for Mr. B to accept Mr. A's offer and for the appraisal to come in at $29M or better. Mr. A approaches Mr. B and offers him $25M for his property. Mr. A proposes that he give Mr. B $21M upfront and asks Mr. B to carry back a $4M note. This allows Mr. A to not only give Mr. B $21M but it also allows Mr. A to keep $4M in reserve. Mr. A now has two mortgages. One for $29M and one for $4M. All Mr. A has to figure out now is how best to structure the payment terms on the $4M note. Although Mr. A will pay $31M dollars for the Happy Trails Apartment Complex in the end, how long do you think it will take for the property to be worth another $4M? Not many. And if Mr. A did some small thing like freshly painted all the units and raised the rent by only $5, he would generate an additional $15,000 per month instantly! I could go on but hopefully I have sufficiently explained how real estate investors are creating notes and taking advantage of our Table Funding/Simultaneous Closing Program to achieve their goals. If you would like to know whether Simultaneous Closing could work for you, contact us and let's discuss what your options are. Frederick Webb is a Certified Cash Flow Consultant and is President & Co-Founder of Webb Funding Group, a small debt brokerage agency he runs with his wife, Kashita Webb. Visit their site: http://www.mortgagenotecash.com
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Buying Foreclosures - Knowing Why Helps You Buy One big potential deal-killer in buying foreclosures is the homeowner. If the homeowner does not trust you, buying their home (even at a foreclosure auction) can become a greater challenge. The 5 Biggest Mistakes Made When Getting A Business Appraised Most business owners will, at some point, want or need to know how much their business is worth. They will be faced with the task of finding someone to perform a business appraisal or valuation. Bulgarian Property Market Insight GOLF GRABS BULGARIA!At the present time there are only three golf courses in the whole of Bulgaria: one at Elin Pelin, near the capital, Sofia, and two owned by Air Sofia. These are located at Ihtiman, opened in 2000, 40km from Sofia, and at Sliven, opened in 2004, 90km from the Black Sea. A Beginners Guide to Flipping Houses If you're dreaming of making money in real estate, it's time to stop dreaming and get to work, because making money in real estate isn't just a vague pipedream. It can be done, even by a young and inexperienced person, when you learn how to "flip" houses. Buying A Home - What Is That Noise!?! You've found the perfect home, closed escrow and just finished moving in. As you happily fall asleep, all seems well in the world. New Homes in Ridgefield Location:Frequent travelers will absolutely delight in this town! As part of the southwest section of Connecticut, Ridgefield is a convenient town to live in since it is only miles away from both the New Jersey Tri-state area and New York City. It is also close to its neighbor, Danbury, and has a steady population that continues to grow. Real Estate Investing - The Motivated Seller How the heck do you find a "motivated seller?"The motivated seller doesn't wear a tattoo on his forehead that announces the distinction. And he never drags you onto his property begging you to buy. The Value of Foreclosed Property The discount on a foreclosed property is not as great if the state allows deficiency judgments by lenders against borrowers. In contrast, the discount is larger if the property is being sold in a state that requires foreclosures to proceed through the judicial system. Selling Houses with Curb Appeal and Design Psychology Curb appeal is the most important challenge you'll face when selling your home. You must make home shoppers feel like getting out of their car to see what's behind the front door. Real Estate Investing Myths That Steal Profits From Your Pocket One of the things that distresses us about our industry is the amount of wrong or incomplete information available to investors. Some myths block what otherwise would be a great deal, while others would have you believe that a bad deal is actually great. 5 Hot Tips for Successful Real Estate Investment The last downturn of the global stock market saw millions of 'every day' investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any money invested in stocks and shares was gloomy to say the very least. How To Create A House Buying Wish List For Your Dream Home Buying a house is one of the most exciting things you will ever do. But there are LOTS of little details involved - details which can be very costly if they are overlooked. The Listing Agents Role in Selling Your California Home Advertising to the "Public"Every home seller likes to be assured that their listing agent and or their real estate company will run ads featuring their home. Newspaper ads range from color photo ads to lots of listings reflected on a page with primarily only copy. Apartment Financing Explained So you're interested in entering the world of property management? Have you thought about how you're going to get into this potentially lucrative market? Let's face it; unless you've just inherited a large sum of money or are otherwise independently wealthy you're going to have to borrow. This is where apartment financing comes in. Choosing An Estate Agent With so many estate agencies vying for your business, choosing the right agency can be difficult. We have put together the following top ten tips to help you find and use the most appropriate estate agent to sell your house. Maltas Market Battle With new destinations such as Bulgaria, Slovenia and Croatia offering two and three bedroom apartments for sale for 50,000, there was concern last year among some Malta estate agents that 2005 could see a drop in the number of UK and Irish buyers choosing to buy a holiday home on the island.With good all year round temperatures enticing many buyers for the winter months as well as the summer, driving on the left and a warm welcome from the local population who nearly all speak English, Malta has been popular for some years among overseas property buyers. 3 Strategies For Buying Property With No Money Down Everyone has heard a story or read about someone who bought a property without paying a single dime as a down payment. But how does this work?There are several "classic" methods commonly used to purchase real estate with no money down. Dont be Tempted by We Buy Houses (Updated) Do you want to sell your home right away? Don't be tempted by "We Buy Houses" or "Sell Your House in 9 days for Cash" ads and billboards.Savvy real estate investors run these ads and put up posters looking for sellers under duress. Fixer Uppers: Dont Make This Mistake Making money with "fixer-uppers" isn't about repairing drywall or planting flowers. It's about using the right approach from the start. Real Estate Investing - Makeovers vs. Flipping Please don't call it "flipping."Some real estate investors who practice the technique of buying property for immediate fixup and resale call it "flipping houses.
|
| home | site map |
| © 2006 TIGER MEDIA |
