How Real Estate Investors Use Mortgage Note To Purchase Properties

Many of you may not be aware of the various ways notes can be used. The average person's understanding about notes is that people create them because they are desperate to sell a property. Nothing could be further from the truth.

Real estate investors are now creating notes to finance properties they wish to buy--then selling the notes in advance--then buying the property with the proceeds--in effect, with little to no money down; of their own.

Selling a property by being willing to create a note actually shows savvy on the part of the seller. Even some real estate agents view a seller's willingness to sell by owner financing as a desperate...but the real estate agent who knows better is very hard to find. Most of them are missing not only the boat, but the whole ocean!

Not to demean real estate agents, but most of them have a linear kind of thinking about how to sell property and it not only limits their own income, but hinders them from being the best helper they could and ought to be to property sellers.

Real estate investors and savvy property sellers bypass working with real estate agents for mainly the above mentioned reasons......not to mention the savings realized by not using real estate agents and having to pay their fee.

Okay, so here's a scenario we recently worked on to give you an example:

Mr. A wishes to buy Happy Trails Apartment Complex from Mr. B. The Happy Trails Apartment Complex is a 300 unit complex and is desirable when you run the income and expense calculation numbers on it.

The price is $25M and the appraised value is around $29M. Mr. A envisions that if he were able to create a note for $29M and sell it to note investors at a discount, he might still be left with enough to make an offer to the seller. Confused?

Okay, Mr. A approaches us with a proposed $29M note he wants to create in advance to buy Happy Trails Apartment Complex from Mr. B. We investigate the case and find that the property can service the debt.

Mr. A has good enough credit and sufficient equity in other properties to pledge as collateral to satisfy our investors. All that's needed from this point is for Mr. B to accept Mr. A's offer and for the appraisal to come in at $29M or better.

Mr. A approaches Mr. B and offers him $25M for his property. Mr. A proposes that he give Mr. B $21M upfront and asks Mr. B to carry back a $4M note. This allows Mr. A to not only give Mr. B $21M but it also allows Mr. A to keep $4M in reserve.

Mr. A now has two mortgages. One for $29M and one for $4M. All Mr. A has to figure out now is how best to structure the payment terms on the $4M note.

Although Mr. A will pay $31M dollars for the Happy Trails Apartment Complex in the end, how long do you think it will take for the property to be worth another $4M? Not many. And if Mr. A did some small thing like freshly painted all the units and raised the rent by only $5, he would generate an additional $15,000 per month instantly!

I could go on but hopefully I have sufficiently explained how real estate investors are creating notes and taking advantage of our Table Funding/Simultaneous Closing Program to achieve their goals.

If you would like to know whether Simultaneous Closing could work for you, contact us and let's discuss what your options are.

Frederick Webb is a Certified Cash Flow Consultant and is President & Co-Founder of Webb Funding Group, a small debt brokerage agency he runs with his wife, Kashita Webb.

Visit their site: http://www.mortgagenotecash.com

---

Boston Real Estate ? You Still Have Considerable Control Over the Sale of Your Boston Home

Boston real estate is a hot topic. Daily newspaper articles... Read More

How to Buy a Property in Bulgaria

The CostAlthough the property prices in Bulgaria are quite low... Read More

Are You Really A Twenty First Century Investor

Today's residential real estate market for investors has become very... Read More

Golf and Waterfront Living: Live, Play, Relax

With today's planned lifestyle communities, golf and boating enthusiasts have... Read More

Hey Landlord! Is Your Lease Legal?

The longer you are a landlord the more you strive... Read More

Real Estate Local FAQs.

There are many frequently asked questions and any local real... Read More

Sell Your Income Property For More

Selling income property isn't like selling a house. You can... Read More

Conditions Are Right For Buying The Higher Priced Home You?Ve Always Wanted

Higher interest rates and home prices in the past have... Read More

A Powerful Suggested Technique for YOUR Home & Property Search

A Powerful Suggested Technique for YOUR Home & Property Search... Read More

How to Become a Successful Real Estate Investor

Many folks dream of becoming real estate investors, but not... Read More

Real Estate Website Marketing - 5 Steps to Crushing Your Competition and Doubling Your Business

Getting your real estate website more traffic is easy if... Read More

Crossing the Gap from this Home to the Next: Bridge Loan

So you're thinking of getting into a bigger house. You... Read More

Selling Your Home? A Warning About Attachments

Before you list you home for sale, determine what you... Read More

Real Estate Bubble: Sophisticated Musical Chairs?

The real estate bubble is a hot topic today; annual... Read More

Look Past the Bottom Line for a Propertys Potential

It's unfortunate that many real estate investors tend to look... Read More

Real Estate Bubble Adding Price and Risk to Location, Location, Location Mantra

Real estate investors familiar mantra location, location, location are nervously... Read More

Why I Love Country Living

As somone who has lived in both places, I can... Read More

Real Estate Investing: How to Choose a Lender

To become a successful real estate investor it's vital to... Read More

Negotiating and Sales Skills Are Critical

When I first started getting active in creative real estate,... Read More

Why Move to the Poconos?

Awaken to the sounds of softly rustling trees and tranquil... Read More

Tax Assessment/Appraisal: How Do I Know What My Home is Worth?

If you are in the home buying or selling market,... Read More

Real Estate Appraisal - Do It Yourself

For single family homes, there are two basic methods used... Read More

Real Estate Investment 2005 - The Hottest Countries for Investment in 2005

Whether you are a real estate investor looking for a... Read More

Refinance Rental Property - Dont Sell It

You own a rental property for years, and never see... Read More

Do I Have To Buy Real Estate Through An Agent?

Sometimes when we are very busy professionals and very rich... Read More

Should You Sell Before the Housing Bubble Pops

For the past several years housing prices have risen dramatically.... Read More

Real Estate, Real Property and Leased Land; Definitions, Discussion and Explanations

Delaware, and the rest of the original British Colonies, has... Read More

Investment Real Estate Done Right -- Your Quickest and Safest Path to Wealth

In investment real estate the quickest way to wealth is... Read More

Afford A Dream Home In Belize

Shopping for property in Belize is not as simple an... Read More

How Long Your Mortgage Runs Determines How Much You Pay

The first thing most of us think about when the... Read More

Will The Real Home Buying Guide... Please Stand Up?

Use Google right now and do a search on, "Home... Read More

3 Mistakes to Absolutely Avoid in a 1031/TIC Exchange

We've all made bad decisions in the past. Don't you... Read More

The Secret To Marketing Your FSBO Home For Sale

You're ready to put your home or land (house, townhouse,... Read More