Posted by CarolFL on April 23, 1999 at 16:33:55:
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How Much More Basic Can You Get? - Posted by CarolFL
Posted by CarolFL on April 23, 1999 at 13:41:51:
Ok, this is rock bottom stuff.
I have the Paper Trilogy and the Video course, but am just starting to wade my way through them…
Can someone direct me to … how to write and sell a note (1st position) to fund the purchase of a property?
We have always either dealt with seller financing and/ or mortage lenders … but this time, I just don’t think we have the time
Dennis is checking the property and the title company should be faxing me comps shortly, but the deal is a HUD contract which is about to fall thru (someone else’s contract), and we have tentatively offered to pick up the pieces and do a simultaneous closing since the contract holder can’t get it together.
The property SHOULD BE FMV $89-90,000, and despite being a HUD, needs only very minor stuff.
The contract which is about to expire is for $61000. We can probably get the contract holder to extend for 2 wks (it expires on Monday!!). Cost: $325.
We are trying to figure out if we can fund this with a note for 70% FMV… how quickly, and what it would actually “cost” to do so.
This is a property we would sell retail, and either wrap the note or have the buyer ‘assume’ the note with a chunky down payment.
I am such a rank amateur at this - I am dying to get a few under my belt so it doesn’t seem to be such a mystery.
Can someone direct me to the appropriate sections of the vast materials? Or better yet, spoon feed me?
Dennis is on his way to check the property and I am on the Title company’s case to fax me comps.
(PS there is only one title company in our area who will do this!)
Thanks,all.
Carol
Re: How Much More Basic Can You Get? - Posted by John Behle
Posted by John Behle on April 23, 1999 at 15:44:14:
First, read J.P.'s article on creating a note.
Second, find a local paper buyer or hard money lender(I assume your property is tied up - under control).
You need to coordinate with them and structure the note as they want it to be. I say a local buyer because they can usually be quicker and are more flexible as far as looking at value as opposed to sales price.
A B/C lender may be your quickest and possibly cheapest road in this transaction. Shop around. They can vary in rate, terms, etc. A hard money lender would be your next best bet, but some can be costly.
Some of the national buyers may be able to help you, but it may depend on how quick you need to move. It might be worth the extension if you can get a lower rate, less points or less discount. You need to shop around and get to know these people soon.
You find the local buyers through the classifieds “Money to Loan” “Contracts and Trust Deeds”, etc. Also check the yellow pages in your area and look at the buyers listed at www.notenetwork.com. Try to deal direct with a funding source, instead of a new broker that was just churned out of one of the seminar mills if possible.
I don’t broker notes, so I’m not current on which funding sources will possibly deal with simultaneous closings and fund on appraisal instead of purchase price. That’s why I suggest the local brokers and lending sources.