Bonds.... - Posted by Pavon Bailey

Posted by GL on June 19, 2000 at 21:36:27:

It’s been a while since I read anything of Robt. Allen’s however… I believe the point of using bonds as a down payment was this:

The book was written when interest rates were very high. That means old bonds were selling cheap. After all why should a buyer buy your old 7% bonds when they could get brand new ones paying 14%? Well the reason is, the owners of the old 7% bonds had to sell them cheap. So you could buy them for half price. Now you take $5000 and buy $10000 face value of bonds, and give them to the seller of the property as a down payment. Why would they take that? BECAUSE THEY ARE MOTIVATED LOL. And that is like getting $5000 extra discount off the price.

Also when the bank says " How much is the down payment" you can honestly say, “$10000”. And if they will settle for a 10% down payment that means they will loan $90000 on the first mortgage. They wouldn’t do that if you said $5000.

That was OK back then but I doubt you can buy bonds at such a discount as to make it worth while, though if interest rates keep going up those old tricks may come back in style, like bell bottom trousers and flower power LOL.

Bonds… - Posted by Pavon Bailey

Posted by Pavon Bailey on June 19, 2000 at 18:16:44:

Hello pros out there!

I was wondering if anyone ever secured a real estate transaction with bonds instead of a mortgage. The reason why I’m asking is because I am working on a deal and I read in NO DOWN PAYMENT that many sellers will feel more comfortable selling their properties secured by bonds instead of a mortgage.

If anyone has done this type of transaction before, please let me know how you did it and what happened.

The seller I called today is very nice…some sellers I called are very rude. I told Ed Garcia on the phone that an agent was rude to me when she found out I was 22, still in college, and trying to buy my first investment property.

Ed kindly and tactfully told me not to worry about her because she does not know what she’s talking about.

THANK YOU MR. GARCIA!!! When I do buy my first property, I will call that agent and laugh in her face! HAHAHA!!! (just kidding). smiles

I know I drift away from the subject sometimes, but I had to let you all know.

Thank you and good evening to you all.


Re: Bonds… - Posted by mike

Posted by mike on June 21, 2000 at 05:43:17:

i bought “cats” and used them as collateral for a note. we asked attorney to hold them for ten years, and they matured, and paid off the note. motivated seller. i had met his primary needs with cash. most people need all cash, but dont be afraid to try.