Real Estate Notes – Part II
This is part II of this week’s topic on investing in Notes as part of your real estate investing business:
Part I is right here, if you missed it.
After a few months or years go by, sellers often grow tired of waiting for those payments to trickle in each month. They may prefer a lump sum of cash to:
- Pay bills
- Take a vacation
- Make a new investment
- Send a child to college
- Or meet the multitude of life’s money demands.
To receive cash now, a note holder can sell or assign the right to receive future payments to an investor!
The investor researches the transaction, known as due diligence, and once satisfied pays the seller cash in exchange for future payments. The investor also pays a referral fee to any note finder, consultant, or note broker that brings them the deal.
This creates numerous moneymaking opportunities for both immediate cash and future income including:
- Earn referral fees by matching note sellers with investors
- Invest in notes for interest income at double or triple digit returns.
- Negotiate to buy notes at a discount and resell at a higher price.
- Participate in partial purchases by selling off the first part of the note and keeping the tail-end payments for future cash flow.
- Purchase the net cash flow between the first lien and second lien on a wrap mortgage or all-inclusive trust deed.
- Restructure notes to increase return using the time value of money.
- Offer owner financing to quickly sell properties you own at full market value.
- Buy property at favorable terms, even when banks say “No!”
- Purchase non-performing notes to gain control of property before it goes to foreclosure.
- Invest in underwater or delinquent notes and restructure with the payer at favorable terms.
- Access self-directed retirement funds for tax-deferred or tax-free investing.
There will be more information coming this week. In the meantime, here’s a little about the expert who put this information together for REIF:
Tracy Z. Rewey – NoteInvestor.com
Tracy Z has handled millions of dollars in owner financed real estate notes since 1988, becoming a well-known industry expert. Why make expensive mistakes when you can gain priceless insights? Tracy shares her 25+ years of insider secrets with real life examples that help you realize profits today and build cash flow for the future.
Tracy began her career in real estate closings and title searches working for an institutional note investor. During her 10 years with Metropolitan she mastered a variety of note investing skills including broker relations, investment analysis, closing management, underwriting, and BrokerNet™ software development.
Tracy left her position as Vice President of Metropolitan in 1997 to open Diversified Investment Services, Inc. with her husband and business partner, Fred Rewey. From start-up note broker to corporate officers for the nation’s largest note buyer, her experience covers all aspect of marketing, closing, underwriting and servicing cash flow notes.