Dear Purchasers of Notes/Mtgs.,

1.  Does it have to be seasoned?  If yes, for how long or how many payments?

Usually some, but not always.  It greatly depends on the other factors in the transaction, and whether you’re trying to sell a full, or simply a partial.  I occasionally buy notes without any seasoning, while on the other extreme I may need to see 24+ months of seasoning before considering any type of purchase.

2.  Do you have minimums and maximums on the dollar value of the note/mtg.?

No.

3.  What type of discounts are required and how do they work?

Once in a very rare while, I can pay as much as .90 cents on the dollar, most are in the .60 – .75 range, with some I wouldn’t pay a penny for.  There is no standard discount.  It all depends on the variety of unique circumstances attending each transaction.  The overall discount will be minimized if you choose to only sell a partial, and keep the tail end of the note for yourself.

4. What is the process if I have a note to sell?

Send me the note and security instrument (mortgage or deed of trust) and let’s have a brief phone chat. A brief overview of the transaction is also extremely relevant:

• Type of property securing the note
• Location of the property securing the note
• How long you owned the property before selling it
• Sale date
• Sale price
• Amount of down payment
• Credit score of buyer/payor
  

I’m guessing you’re asking about this because in your real estate investing business, you may need or want to use owner financing (with the subsequent sale of the real estate note) for either acquisition or disposition strategies, or both?  I can usually help structure these types of transactions for maximum financial benefit when I am brought in as a consultant before negotiations are finalized.

For professionals… real estate agents, new note brokers, or investor/rehabbers in the business of doing multiple deals, I provide limited email and phone support to members of Owner Financing Club.  People who want in-depth coaching or consulting can arrange that as well.

At Owner Financing Club there are many training videos and some downloadable documents that will help you understand notes and more deeply answer many of the questions you have posed above.  You may want to avail yourself of this affordable education (and support) as a way to increase the number of tools at your disposal for investing in real estate.

There is also a fairly new (and free) one-hour video that will help simplify much of this conversation for you: Why Notes, Why Now?

To your success,

Dawn

WATCH THE REPLAY BY CLICKING HERE

In my mind, there are more ways to be unpleasantly blindsided with lease options, than with regular ‘ol installment sales.  But the odd thing is, lease options seem to be more accepted, and appear to be much more familiar to main street buyers and sellers, and the real estate professionals who serve them.

I am really looking forward to having Wendy Patton as the guest for the next monthly meeting of Owner Financing Club (Thursday, October 13, 2011).  Besides the other things that will come up, I’m going to make sure we do lots of playing around with various scenarios… to ferret out why lease options might just be the best answer in certain situations, and how to minimize the inherent risks and liabilities.

Like me, Wendy is a licensed real estate broker, which means she is very concerned with doing things the right way… legally, ethically and intelligently.  I am really looking forward to our chat, and plan to learn A LOT from her.

Also, click that picture right above…

If you are reading this post in your email inbox, please sign up for my new e-zine “Property and Paper” to receive weekly (every Wednesday) updates, articles and special offers that will help you understand how to navigate OWNER FINANCING AND NOTES to achieve a sense of Power and Possibility, whether you’re buying or selling property or paper.

The article in this morning’s Issue #1 was about Simultaneous Closings (simo’s, simultaneous note sales, table funding, etc.) I also have a Calculator Corner section that will help you learn to use a financial calculator.

And, I introduced two new classes that I am starting later this month:

Owner Financing for Realtors

Why Notes, Why Now… and How?

The best way to participate in these classes is to be a member of the community at Owner Financing Club, but if you just want to participate in the classes without joining the club, you have that option.

Are we ready to wake up and use our big “outside” voices?  If you aren’t already on the track of understanding how our wealth, individually and collectively, has been intentionally and systematically highjacked, perhaps it’s time… it’s not that fun, but shining a light on the truth of what is happening is the first step towards healing.

Watch “The Money Masters“, and/or sign up for “The Solari Report“.  There are a lot of other sources of similar information, but this is a place to start.

I’ve been pretty quiet lately on this blog… doing a lot of studying, thinking, and emotionally and spiritually processing what all of this means to me… deciding what I believe in, what I want to stand for, how I’ll navigate my business and how I’ll counsel others that count on me for advice for maximizing and protecting both their real and paper assets in these uncertain times.

Money is about to get even tighter with the Fed’s latest move.  Private lenders and buyers of owner-financed paper are going to be increasingly necessary to provide liquidity in the real estate market.

When you start to realize what has happened to us over the last 98 years since the creation of the Federal Reserve in 1913, and you realize how money really works (hint: it’s not what we were taught in school) you’ll go through disbelief, denial, anger, bargaining and then probably spend some time in despair… until you’re ready for acceptance.

Out of acceptance, the clarity of the next step will have a chance to emerge.

Speaking of Operation Twist announced by our friend, Benny Boy (over at the Fed), Chris Mayer writes…

“It’s a plan so dumb you have to have to Ph.D. to believe it will do any good…” (at least this made me laugh)

Markets haven’t exactly liked it, have they?  The DOW is down a few hundred points, most of the big players are selling more than they’re buying, and I hear that trades betting against the S&P 5oo are at an all-time high… and congress is going on vacation without knowing how the government is going to continue to operate next month.  Good times, good times.

Most people should not have direct exposure to the stock market right now.  If you’ve still got regular equities, consider selling them… soon, yesterday or last year.

How is the average saver/investor supposed to protect what is left of their wealth, their money, their assets?

Doing nothing (hiding money under your mattress or in a 1% CD) has become even more risky than investing.  If you aren’t making at least 9% on your money (the current rate of inflation), then it’s disappearing while you sleep.

I happen to believe that investing in notes with lots of protective equity, secured by generously cash-flowing properties in strong, non-bubble, job-supporting markets, is one of the last bastions of growth and preservation of the wealth of the average investor.

Yes, many people want to own those cash-flowing properties and have them professionally managed.  But I’d rather hold the note secured by those assets at half the value of the property or less.  It’s simpler, easier, and I am hedged against further fluctuations in the prices of real estate and rents.

I want to be happy if the note performs, and happy if it doesn’t.

And… there are blended products that give you both…

You can have hassle-free, safe, note-investment returns, plus a piece of the upside of the real asset that secures it.

For the record, here are my other sentiments…

• Have some basic preparedness items on hand… food, water, etc.  You never know when even a random power outage could create craziness around you.  Plus, buying commodities (the things you need and use every day) at today’s prices is a hedge against future inflation

• Start growing some of your own food, even if you’re only sprouting alfalfa and garbanzos.  Here in suburbia, our food markets and warehouses only have a 3-day supply of food.

• Get backyard chickens (this could actually just be a reaction to “empty nest syndrome”… as the children left, I bought poultry.  You feed these goofy little birds for a few months, and they start laying eggs for your breakfast.  I fed four kids for 20 years, and never once did they lay me an egg… just sayin’)

• Hold some physical gold and silver

• Stay grounded in things that make you feel good and help you stay aware of how much abundance is around you right now… the gratitude game

• Look into alternative and complimentary local economic systems that will support our communities.  The California Federation of Time Banks is holding their annual convention in Pasadena on Oct. 1st & 2nd.  We need to create a safety net for all the people who are falling through the cracks

OK, so that’s quite enough for one day…

Find more of my brilliant philosophizing and training segments over at Owner Financing Club (members’ only protected content), and if you want to invest in notes with me, please fill out this Note Investor’s form.

Ciao.  You can sign up for my weekly newsletter by clicking below…

If you want to participate, REGISTER HERE.

[It costs $9.97 to participate... this is not a free webinar designed to up-sell you on an expensive product or seminar... there is specific training being provided that will be very helpful]

I think that notes are one of the few ways for the average passive investor to get solid and reasonably safe returns in a volatile, uncertain market where inflation is probably sitting at around 9%.

If you’re not making at least 9% on your money, it’s disappearing a little more every day. You just want to make sure you’re not risking a lot to get your 9%+… personally, I like to sleep at night.

Kaaren Hall, president of uDirect IRA Services will be my guest, and will help us understand how to use SDIRAs to buy notes, buy property, lend money, etc.

The point I’m trying to make with this video is that real estate investors who focus on wholesaling, and/or buy-and-hold cash flow strategies can greatly benefit from understanding how owner financing (with the subsequent sale of all or part of the real estate note created) can often greatly accelerate profits.

Just wanting to give investors out there a few more options to choose from, and in the process, create more notes I can buy   These strategies are not something I’ve talked about before.  They don’t actually reflect the old school version of the note business… new things are evolving in this market.

Diversifying your investment strategies can be an intelligent hedge against unforeseeables in the marketplace.

The complete 23-minute training video is hosted at Owner Financing Club, and will help you evaluate the ROI in various investment situations, with and without the use of owner financing.

Over the last 5 years alone Mathew has purchased, renovated and sold or kept over 125 properties and specializes in cash flowing real estate investments, real estate and business consulting and helping investors obtain a higher return on capital.

I also happen to know that he will carry paper for other investors, helping them get into cash-flowing properties without always needing all cash up front, or the expense and hassle of bank loans or hard money.

Date: August 4, 2011
Time: 12:00 – 13:30 Pacific time

I also just posted bonus interviews with Bill Tan, Gordon Moss, and one of our own… Maher Hazine!  I’ve been inspired and instructed by each one of these people, and I think you will be, too.

Have you left your comment yet?  You have until tomorrow

Here’s the REPLAY of the call.

It starts at 6 p.m. Pacific / 7 p.m. Mountain / 8 p.m. Central / 9 p.m. Eastern time tomorrow, Tuesday, July 19th.  To listen in, call 605-477-2100, Access Code: 857097 # when it starts in your time zone (Magic Jack may not work).

If you have questions you may e-mail them to me any time before or during the teleseminar:  wjm@PaperSourceOnline.com”

“Owner financing is a partnership between the lender and the borrower.” 

It’s always wonderful to come away with life-changing “a-ha’s”, especially when you don’t necessarily expect them.  It’s not that I think I have nothing left to learn… quite the contrary, but I’ve spoken to Walter on multiple occasions, so I didn’t expect to be blind-sided by core ideas that could very well change the way I put my next deal together.

After 30 years of investing in real estate from every possible angle, find out why and how Walter will NEVER PAY CASH or hard money rates ever again.  According to him, if you’re paying more than 5% on real estate financing, you need to rethink your game.

Another great quote:

“As investors, we can make back everything we’ve lost in the last 5 years”

He also describes exactly how he does his marketing for both acquiring and disposing of real estate.

CLICK HERE to listen to the recording of this perspective-changing interview.

He also describes how he is making home ownership cheaper than renting for buyers, and giving investors a way to finance properties that will cash flow for them.