Virtual Coffee Q & A

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Ok, so here’s a couple things we covered during the call:

• Best methods for structuring owner financed notes and land contracts so that they are sell-able in the open market

• Pros and Cons when foreclosing on a note with a partial

• What to do when the borrower files Chapter 12 Bankruptcy

• And much much more!

Thanks, again, for participating in this wonderful world of owner financing and notes. Now go out there and do your part to create financial solutions, just one Mom n’ Pop to another 😉

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

I was trying to explain that besides the increasing safety and security you get each month, having a few discounted notes in your portfolio exposes you to a wonderful upside you just can’t get with most private money loans. If a long-term amortizing loan pays off sooner than expected, the ‘unearned discount’ can really blow your mind. You won’t believe how high the returns can be even with super conservative note investments when they pay off early. You also don’t have to look for new deals constantly to keep your money working. If you aren’t ready to immediately deploy proceeds from a loan payoff, it will sit doing nothing for 1-3 months, effectively decreasing your annualized yield to 7-9%, even if you are lending at 10-12%.

Peter is one of many who really took a beating in the downturn of 2008. Real estate and stock market losses were absolutely brutal for people all across the country, and he is cautiously wondering if he should (and how he can) start dipping his toe back into the real estate investing world.

In my opinion, we are in bubble territory again and it won’t be long before we have another nasty economic reset. That doesn’t mean I’m hiding under a rock. Life must go on and… I am conservative in my approach and will only do a deal if it still makes sense even in the context of 25% depreciation or more. If I buy a property, I either buy it significantly below market, or secure excellent owner financing terms, or both. The property has to be able to carry itself, i.e. the cash flow has to cover all expenses and debt service. That way I don’t really care all that much what the market value of the property is at any given time.

Notes can be a great way to play the real estate game in times of uncertainty because you minimize your exposure to depreciation and loss of principal.

Robbin is a real estate broker who has successfully engaged in the NPN space as a way to acquire real estate at a discount. She bought several non-performing notes, foreclosed, became the owner, rehabbed and then rented them out. They are absolute cash cows, but she needs her seed capital back out of it. She is looking to owner finance to someone looking for a turn-key rental in Ohio.

She’s all in at $25,000. She’ll owner carry to another investor for $50,000 with a $25,000 cash down payment. The place rents for $750, so it is enough to retire the debt service (the $25,000 first note and mortgage to Robbin) in just 5 short years, leaving the lucky investor with a free and clear rental brining in $9,000 in gross rents each year. Perfect for a self-directed IRA!

Thanks, again, for participating in this wonderful world of owner financing and notes. Now go out there and do your part to create financial solutions, just one Mom n’ Pop to another 😉

Here are a few important links to bookmark or save:

This month, that person was Kennesha, a long time mortgage originator currently working at a credit union, who has been sitting on the sidelines, desperately wanting to get started investing in notes, but wondering how to navigate when she is a single mom of 2 young boys and has had to use up her own nest egg to survive over the last few years. I think you will really get a lot out of hearing her story and be inspired by her clear and passionate intent to create passive income, eventually freeing herself from the W-2 grind.

We also heard from Keoka, who is close to taking down her first note investment, and Chris, who had a wild ride with his first two NPN purchases through a broker, but is ready to get back in the saddle again. The partial note purchase idea sounded extremely attractive to him, so he plans to explore that in weeks to come.

Now go out there and create financial solutions, just one Mom n’ Pop to another 😉

Here are a few important links to bookmark or save:

Can’t tell you how much I love these calls. I’m not always able to get to every email that comes through, but this monthly call is where I can be available to facilitate answers, an informal mastermind free of charge.

Our first question was from Nancy, a real estate broker in Florida, who does a great job getting probate listings and finding cash buyers for them, but she is struggling with how to talk some of her sellers (heirs & beneficiaries) into carrying paper instead of just wanting all cash, because she’d like to be able to add some properties to her own portfolio, as well as help some of her other investors get good terms on an investment instead of having to come up with all cash.

When the heirs want to be cashed out most of the time, the only way an owner carry deal makes any sense to them is if you can show them how carrying paper and selling the note will net them more than an all cash sale. Obviously, to be able to do this, you need to have an idea of what someone will pay for a note on the secondary market.

Another idea is not to fight upstream getting someone to do something they don’t really want to, and play along aikido style… moving along with the flow of their energy, not trying to resist or change it. What if one of her cash buyers would be willing to buy a property cash and owner carry it to her?

The next discussion was brought to us by Keoka, one of our OFC community mastermind members, who has done a fair amount of real estate investing, but is newer to buying notes. Right now she is preparing to close on an owner carry note she found through a broker, or note wholesaler, and she had some questions about the contract she was being asked to sign, and how the double close would actually work.

Not all of the due diligence is in, but it looks like she is going to be able to buy a note secured by a mobile home on land in Texas at 58% ITV (investment-to-value) which is great safety. The buyer/borrower put down a 20% down payment at the end of last year, and there is a solid 8-month pay history. Her yield is north of 15%. Congratulations, Keoka!! Rock on.

Right at the end, we heard from a guy from New York, who buys properties for cash on the cheap and then carries the paper. Everything was going smoothly for him in Alabama until his RLMO (registered licensed mortgage originator) up and retired on him…. rude, right? 😉

He was wondering if I had anyone I could recommend.

Unless you’re in a state like CA, AZ, TX or FL, it can be hard to find a large national player who will do this service for you. Your best bet is to leverage existing relationships. If you have a mortgage broker you are regularly sending business to, or if you have a real estate agent you consistently work with, see if they will leverage their relationships to find an RLMO that will underwrite your owner carry deals for you.

As always, thank you so much to those who spent the time to be on the call, participate and share their expertise… I appreciate the value that comes from the group experience.

Now go out there and create financial solutions, just one Mom n’ Pop to another 😉

To find out when the next Virtual Coffee Q&A call will be you can reference our Facebook Events.

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Tom from Wyoming started us off. He is selling two 4-plexes he owns free and clear to some friends and thinks he should be using a land trust… I agree. Selling price is $450,000, and he is only taking $10,000 down and leaving a lot of passive income on the table for the new owners. He is glad to do this because it is a fabulous strategy that provides nice income for retirement… he gets to defer capital gains, make a whole lot more than the bank would pay him on deposits, and by using the trust, he won’t have to foreclosure if his friends fall on a hard times and can’t make the monthly payment. That tightens up the underwriting, reducing the risk substantially.

There are several good land trust courses out there that include forms and documents. The guy who taught me and still supports me around any questions I have is Randy Hughes, and I suggested Tom check into his products and services. Randy’s basic land trust course is included with Premium membership to the OFC community, so if you plan on engaging regularly with these topics, you should consider joining us here and get a lot of bang for your buck.

David from Houston has started flipping houses, but wants to explore ways he could add owner financing and notes into his repertoire of investment strategies, especially what might make sense inside of his self-directed IRA. We talked about how he could sell with owner carry terms, perhaps adding a small premium for being willing to offer the financing, and then sell off a front-end partial to a co-investor to give him the capital to go out and do another deal. This would easily give him double digit returns on his retirement dollars.

Once you start down the path of learning about owner financing and the secondary market for notes, you’ll never go back… you’ll be hooked, twisted beyond all recognition… there will be no end of ways you can put deals together for the benefit of yourself and others. Adding these tools to your tool belt makes you a MUCH better problem solver, and it’s a lot of fun. Consider joining us on the island of misfit toys… we’re all a little bit odd.

As always, thank you so much to those who spent the time to be on the call, participate and share their expertise… I appreciate the value that comes from the group experience. Now go out and create financial solutions, one Mom n’ Pop to another 😉

To find out when the next Virtual Coffee Q&A call will be you can reference our Facebook Events.

Here are a few important links to bookmark or save:

So many great contributors this morning… John from Idaho was able to get owner financing on the purchase of a property in probate, but they needed more cash at closing than made sense for him to make as a down payment. We talked over ideas of how he could structure the transaction to meet the objectives of both parties.

Daphne from Illinois buys non-performing 2nds, and she was having an issue with one that was lien-stripped in California as part of a bankruptcy proceeding. Bac (Nico) from San Diego came to the rescue with some great information, as he regularly and almost exclusively buys NPNs that are in some stage of BK. He has a problem note in IL, so it looks like they will profit by working together.

Colleen was having a problem with a property near Joshua Tree National Monument, CA that wasn’t selling, and we talked about various marketing strategies. A couple others chipped in with great suggestions that I wouldn’t have thought of. AnDrew, a Realtor, made arrangements to follow up with her after the call… he had some connections out that way.

Those are just a few of the great things we covered.

As always, thank you so much to those who spent the time to be on the call, participate and share their expertise… I appreciate the value that comes from the group experience. Go forth and continue to create financial solutions, one Mom n’ Pop to another 😉

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

I always enjoy these calls where people from all over the country call in to talk about what’s going on with notes and real estate in their area, or to ask questions about certain transactions that are in front of them. Hope to have you join us whenever you can!

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

I always enjoy these calls where people from all over the country call in to talk about what’s going on with notes and real estate in their area, or to ask questions about certain transactions that are in front of them. Hope to have you join us whenever you can!

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

I always enjoy these calls where people from all over the country call in to talk about what’s going on with notes and real estate in their area, or to ask questions about certain transactions that are in front of them. Hope to have you join us whenever you can!

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Mickey, a new member of the OFC community had a lot to offer this month. First, we started talking about a duplex he and partner own free and clear together. How do you sell with owner financing and still pay out the 50% partner who wants to walk away with his cash? Several solutions came up.

Gines was talking about some note tapes he has been evaluating on behalf of his real estate team, who wants to diversify their investments into notes. Chuck was asking about business notes, and how business and real estate owners can defer capital gains and have nice income for retirement… and, sell for a price that they like, not a discounted cash price.

I shared a few of my experiences with buying a non-performing note, and how it’s going now that I own the property. I also have a couple non-performing notes I may broker off. I am buying a performing owner carry note from a guy in Florida. He also has a couple privately originated NPNs he is looking to sell, and I’m not sure I want them for my own portfolio. I’m just not set up to handle a large volume of non-performing paper.

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

I always enjoy these calls where people from all over the country call in to talk about what’s going on with notes and real estate in their area, or to ask questions about certain transactions that are in front of them. Hope to have you join us whenever you can!

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

I always enjoy these calls where people from all over the country call in to talk about what’s going on with notes and real estate in their area, or to ask questions about certain transactions that are in front of them. Hope to have you join us whenever you can!

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

There were several great conversations this morning, but one that stood out to me was at the very end. Long time landlords are concerned about the low percentage of home ownership in their community, and they want to figure out how to bridge the gap… they don’t want America to become a serfdom. After a few owner financing deals, though, all their capital is used up. They are grappling with how to structure their transactions in a way that they’ll be able to sell part of the note to get their ‘seed capital’ back, so they can go out, buy another house, and provide the American Dream to another deserving couple.

How do you offer terms but still get cash back out without taking a huge discount on the sale of your note?

To find out when the next Virtual Coffee Q&A call will be (and to see what else we have going on), please reference our Facebook Events.

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

Here are a few important links to bookmark or save:

This morning we talked with several people involved in the note business… Mark from Ohio shares his experience with a new direct marketing campaign for seller carry notes, and I ask him to seriously consider finding a way to buy them, instead.  Once I shifted my attention to buying (with OPM) instead of flipping the notes or brokering them, my life changed profoundly in a relatively short period of time. Think like an investor, not a ‘finder’, even if you decide to broker notes much of the time.

Increasingly spend energy cultivating money partners and buy notes for your own account, keeping a piece of the passive income as your profit, instead of a one-time fee. Note sellers like talking to the actual buyer of the note, not someone who lacks the ability to make a decision, pull the trigger and get money into their hands. Plus, there’s no faster way to really learn what the note business is all about than to buy and manage a small and growing portfolio of notes.

Mark from Phoenix wondered how he could transition his house flipping business into more of the paper business. If you understand real estate, then it’s not so hard to learn how to buy paper, notes, loans secured by real estate. The importance of working through a self-directed retirement account also came up here.

At the end, we had a great discussion with Alexis, who has been making private loans for several years with $1,000,000 in personal funds, and she wondered if she should get on the band wagon and shift over some of her portfolio into non-performing junior liens… I think she may have ended up re-thinking that strategy.

Thank you to all of you who participated in the call on Saturday, or who are participating here now… I very much appreciate you joining me for these important and enjoyable topics and I wish you success in all your endeavors.

Here are a few important links to bookmark or save:

This month’s call was an in-depth conversation with one of my past consulting clients who wondered why he hadn’t been successful selling his property with owner financing. There are some great points to think about. We also talked with a gentleman who, for retirement income and estate planning purposes, wants to sell a piece of commercial real estate with owner financing as soon as his tenant’s lease is up next year. Near the end, a Realtor from New York got on to ask about Dodd-Frank. Because his clients are ‘mom n’ pops’ who only usually have one owner financing deal, they are not considered Loan Originators according to Dodd-Frank, and do not need to comply with the regulations. They can even have a balloon. And… it’s still a good idea for them to understand the ‘safe harbor’ guidelines for creating a win-win situation.

Here are a few important links to bookmark or save:

I always enjoy meeting people from all around the country on these calls. There are property buyers and sellers, and paper buyers and sellers, and sometimes the Realtors and note brokers trying to make a living between the two.

Thank you for joining me on the call! This conversation wouldn’t be the same without all of you.

Here are a few important links to bookmark or save:

This was a fun call with members and non-members alike. One of my consulting clients used this time to go over different strategies on exiting a property he picked up for cash. We talked over various owner financing scenarios. Someone else is trying to exit a property that he bought, ‘subject to’ in a land trust, and now wants to sell ‘subject to’ in a land trust. Love this stuff!

Here are a few important links to bookmark or save:

This month’s call started off with an interesting chat about buying defaulted HOA liens… a concept that reminds me a lot of buying NP junior liens. Always enjoy these sessions… you never know what will come up! Maybe I will take a look for these in Nevada, one of the super lien states.

Here are a few important links to bookmark or save:

What a great way to wrap up the year, hanging on the phone with friends, old and new, talking about property and paper. There is a lot of great feedback from all of you, making the brainstorming extremely valuable. When I don’t have direct experience in something, invariably there are others on the call who can help out.

Andy, one of the callers, made great contributions sharing his insights as a lender for many of the entities that are trying to borrow funds to buy large note portfolios. The financials just aren’t making a lot of sense right now. There is a lot of money chasing real estate and now notes, driving up prices beyond the point at which it makes sense from a risk/reward scenario. He advises that most people not chase it, wait for it to come back down.

There is word on the street that some of the hedge funds are starting to sell off pieces of their property portfolios to investors who can drop $250,000 at a time. If the investor comes in with a 25% down payment, the hedge fund will finance the remaining 75% at 4% interest. I do not have any direct knowledge of this, or contacts for you, but you may want to dig around if this interests you. My guess is that the notes they are gobbling up will eventually come back to the small bread-and-butter investors as they realize they are losing money, and unable to properly service all the notes they are holding in portfolio. The markets are incredibly crazy right now, but I do know several people personally who are making a lot of money in the NPN space.

Here are a few important links to bookmark or save: