Yes, I consider the discount a cost of doing business. This expense is part of my calculations well in advance.
When I refered to control, I was speaking about the R.E. transaction more so than the paper. I like to do all of the legwork / pre-qualification dealing with the creative financing to keep the number of surprises (ie: loan turn downs, slow lenders) to a minimum.
You can make a good deal better by maintaining an intrest in notes you sell. Selling partials on simultaneous deals are a great way to set up future cashflow for your portfolio AND make money now. If the property pays off early (7 years is the avg. for owner financed notes) you still get some cash! (as determined by a partial amort. schedule)
Hi
Have been reading and studying about the Note Business for awhile now. I have rental units and are doing some rehabs to flip. I would like to get started in the note business to creat a cash flow. So far I understand dealing notes, but I’am having no luck find these note. I’ve built a repro with realtors, bankers, title co.,etc. Also spent time in my county records looking for some notes. I was woundering if someone would have a sure fire way of finding these notes. Would like how to get a supply of these note coming in. Thanks for any information someone might have
Alex
You are in a perfect position to create notes and sell them (full or partial) @ closing on your rehabs or flips. Since you understand the basic concepts of paper, just work with a funding source and structure these “simultaneous closing” deals so they are beneficial to you. It is not uncommon to get by with only a $1,000 discount. These transactions are gaining popularity in the industry.
The real wealth potential with paper is owning it as compared with just brokering. Also, you maintain CONTROL of your R.E. deals when selling. Structure the terms and tell the buyer what you can do for him/her. I never have buyers try to negotiate because I make it easy for them accept MY terms of the sale and do all of the work for them.
Once you get the hang of this niche, it is easy to buy, sell and finance property for your own account as well as do “creative financing” for others buying property from a third party. There is NO competition for this paper, you don’t have to advertise, do direct mail or waste time in the courthouse and every note you create is saleable.
Thanks for the information. I guess its like they say, once you get your first one it becomes easier. Sure hope so, this looks like a pretty good way to get a cash flow for a persons portfolio to structure more notes. That is what I’m looking for. Thanks again for the information
Re: Don’t Find Em- CREATE Em! - Posted by Paul(OK)
Posted by Paul(OK) on January 03, 1999 at 01:39:06:
I am trying to determine a mindset so please bare with me. When you discount a note do you consider that the cost of doing business i.e. the “points” (so to speak) that you pay for selling the note? and if you sell your note how do you still have control of it?
The funding source you work with can help you structure a deal that works for you. Fortunately, it does not take much more work on your part. I have received plenty of good help just for asking. Good luck.