Example - Posted by Bud Branstetter
Posted by Bud Branstetter on May 26, 1999 at 16:52:30:
As an example of what type of note would have to be used.
Buy price(should be below market) $65,000 nothing down.
At 7% and 1500/month you would pay off in about 50 months
You may be able to sell for $70,000 and $5,000 down. At 80% you could raise $56,000 on the first. With the 5 down and the 56K you would have 61K to buy a partial on a note/notes that gave $1500/mo cash flow. Even at a 11.5% return to the investor you could buy 50 payments for $59,366. You would keep the difference if any after closing costs along with the second.
The more below market or the greater the spread between the buy and sell interest rates the more profits there can be.