Posted by Jim IL on March 27, 1999 at 23:17:26:
Not that I’m experienced enough to offer advice, but I do have a thought. And if I’m WAY off base, let me know.
By “liquidity” do you mean that the investor wants to be able to “pull the money out” quickly or at will?
If it is quickly, what about using the money to buy REO’s in need of repairs (of course, use a note to secure the money from the original investor, to gibe him.her securty, and good yield). Also, you can then create the original note for more than the purchase price, giving you funds for repairs etc.
Then, sell the home after repair “retail” with a newly created note that you sell at close, and pay off the original investor.
When you sell the newly created, “Seller financed” note, you can pay back the original investor, and pocket some cash yourself.
Perhaps even offer a nice “second” mortgage that you hold for a “Down payment replacement” or enhancer. This way you also get a monthly cash flow for yourself, even after the property sells. You can always sell the second later at a discount if you want to cash out as well.
Also, make sure that you “oops” let the original investor see the numbers on the “newly created” note that you sell. Once they see that Yield, they may want to stay in for the long haul?!?!?(more money to them, and to you)
Who knows, it may work, but either way, thier money is secure by the LOW LTV you offer, and the property itself.
Just my $.02