Posted by John Behle on May 12, 1999 at 12:07:46:
That technique works for any properties where the seller is willing to take a note for a substantial amount of equity. We look for no more than a 30% total amount of the value of the property in 1) Cash down payment and 2) Existing conventional loans.
Both would most likely need to be in cash. If the loans are “private” they might be able to discount or trade. See the article on “How to Pay Full Price and Profit”.
Keep in mind that the “Paper Trade” technique can work with any asset. You might find someone with a mobile home, car or other personal property that would trade for a note too.
As far as trading deals, you don’t have to wait to build your own portfolio. You might find other local buyers and investors out there that already have a note portfolio that might joint venture some deals or sell you the notes when you need them for a deal.
Occasionally we have more deals on the table than we have notes for at the moment. That is exactly what I do. I contact other note investors (not “broke-brokers”) to buy from them, joint venture or do a collateral rental.