Creating a note/ Newbie At Large!!!!! - Posted by Kevin

Posted by Michael Morrongiello on March 14, 2000 at 23:32:56:

If you lease to a prospective buyer and also give them an option to purchase the property after a certan period of time goes by and /or they perform you can then also agree to “roll” these buyers into an owner financed mortgage that you woudl provide for them WHEN they are ready to excercise their option./

That mortgage could also be converted into a discouted CASH amount today if you desire by structuing it correctly.

Michael Morrongiello

Creating a note/ Newbie At Large!!! - Posted by Kevin

Posted by Kevin on March 14, 2000 at 22:07:37:

Hey out there!
Could someone tell me the steps one must take to create
a note so that I can owner finance? My line of
thinking is to L/O to a T/B. When they execute the option
I’ll finance so they dont have to go to a lender.
Is this a realistic way to do L/O?
All advice is very much welcome, and Thanks!
Newbie At Large!

Re: Creating a note/ Newbie At Large!!! - Posted by Paul_NY

Posted by Paul_NY on March 15, 2000 at 13:52:09:


If you feel the T/B’s are sincere, get a down payment and collect at least 3 monthly payments, as agreed to in your note and mtg, then sell the note to get the maximum $$ from it.

Some notebuyers will pay good $$ at the closing, aka simutenous closing, and others will not, depends on the notebuyer, all have different guidelines.

Seek out note buyers, not note brokers.

If I can share any of my experiences with you, email me.

Good Luck with it!


Re: Creating a note/ Newbie At Large!!! - Posted by Judy Miller - American Note

Posted by Judy Miller - American Note on March 15, 2000 at 10:35:52:

The key question for you is whether or not you need to get your cash investment, and perhaps some profits, out right now, or whether you can or want to wait.

If you want your cash out now, then you could sell right now and carryback owner-financing. You can then sell this financing, if properly structured in order to maximize your VALUE, at the closing of escrow.

If you elect to do this, then you want to make sure the buyers put enough downpayment into the closing so that they are more than just renters in appearance, and in intention. Few investors like to see someone come in with such a low downpayment that they have nothing to lose other than a “rent deposit”, in concept, if they walk away.

In previous posts, and if you contact our office, we have provided and can again give you the offsetting factors to consider if you are considering owner-financing. There are some basics you want to consider before taking back paper. These include payor’s credit, amount of downpayment, terms of the note you are creating, most particularly interest rate, so that you receive the best value, least discount on the paper you create to keep or sell, now or later.

What is good to remember, you do not have to lease option first in order to then provide owner financing when the buyer exercises the option, unless you find that a personal economic advantage.

And if you do lease option, and if you provide any rent credits as credit toward the downpayment, please make those rent credits “reasonable”, not the whole rent payment. “Sweat equity” is looked down upon, if excessive, in crediting toward a downpayment, unless it is specifically detailed in time and cost of supplies.

There are lots of little pointers. Please feel free to contact me if you would like some more advice.

Best Wishes, Judy Miller, President