Thread: How to make a good note!

Due to the market conditions nowadays, it is getting more and more harder to get loans from the banks and the lending institutions. But there is always a plan B. Real estate investors now are using the owner finance as an alternative to sell their houses faster and then turn around to sell the note. I have summarized in the following points how to create a marketable note that will be slightly discounted without hurting the investors profit.

1-The down payment of at least 10% which creates the equity that covers the unseasoning.
2-A competitive interest rate, not too low, not too high. In general, 8-10% is reasonable.
3-Terms of the note, the traditional terms are preferable (amortized over 120 months, 180 moths, etc...)
4-Monthly payments are for principal + interest. Avoid interest-only terms
5-Avoid Balloon payments
6-Insurance on the property and your name as mortgagee is a big asset that many investors forget.
7-Credit score, the higher the better
8-The note has to be 1st position, no other debts involved in the deal. You have to make sure that the down payment was not borrowed, so now you have another hidden debt involved in the deal.

This is not a legal advice by any means, it is just sharing some knowledge in the real estate market that might help people of not going about of business. I believe this might indirectly help our economy to keep a cashflow in the market.

I know that professionals like attorneys and CPAs, they come across notes more often and i will be glad to help any of your clients to cash out their notes

Hi friend.
Yes i can understand your problem. The points that you have mentioned are really good. Well now a days mostly peoples give first attention in investment and in that mainly in real estate investment. I tell you one thing that my friend had invested in real estate he was not sure of the profits there but he recently had his real estate deals from IRA-401K and he was quite pleased with his investing. He also suggested me to invest and i am also going to do that after some time.

Investing in real estate is really beneficial as long as you are in the right place, at the right time because investing in property can be one of the most profitable and enjoyable forms of medium to long term investment. Careful planning and consulting to the right people is also a great help in looking for a good real estate investment.

Ensure that the interest rate being charged is at least as high as comparable bank rates.

Keep the term of the note as short as possible. Everything else being equal, a 10-year or 15-year note is worth more than a 30-year note.

In the recession time, Investment in the market will be a great thing. Have you ever calculate earlier before when the market was very down and now is on some higher level. That's the main profitable time for investing. Go for that..
Thanks

1. Make your notes short
2. Mark the passages containing useful information
3. Be sure you know exactly what information you have to find
4. Make sure your notes are legible
5. Use your own words