"Life consists not in holding good cards but in playing those you hold well."Josh Billings
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Flipping a House for a Real Estate Profit
House Flipping is the term used by investors who purchase a home for the sole purpose of quickly relisting the house for a profit. In many hot markets, a house can appreciate in as little as a few days! In these markets, it doesn't take long to realize a ...
Interest Only Mortgages: A Risky Real Estate Move?
Well, let's examine this information, one piece at a time. The first piece to examine is the basis for the desired interest only mortgage product. What type of investor is looking for the interest only mortgage? Many of your real estate investors ...
Real Estate Title Transfer Tale
The story unfolds like this... A married couple buys ten acres of land in anothercounty where they plan to retire when the time comes. Two years later they divorce. Title to their tenacres remains in both their names after the split. Months later the wife ...
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1. They make sure that the insurance policy on the property is issued for an amount that represents at least the full value of the note still owed to them.
2. They also make sure that the note is recorded and they are listed as mortgagee, trustee, or the first contract holder on the policy. This guarantees that they will be entitled to any proceeds from any claim ahead of the borrower. 3. They make sure that they get a notice of cancellation if the borrower fails to keep a current policy on the property.
4. They make sure that real estate taxes are paid on time by the borrower, and if necessary the note holder will pay the taxes themselves.
5. They make it a habit to drive by the property on a regular basis or have someone drive by to make sure that their investment is still intact.
6. They keep all pertinent information on the buyer in a safe place in case of fire, flood, earthquake, hurricane, tornado or any other type of catastrophe.
7. They make sure that they have received an amortization schedule from their attorney or title company so that they can keep up with all payments that are made to them.
8. They notify the borrower well in advance (at least 3-6 months) before a balloon payment is due. This gives the borrower more than enough time to find favorable financing; this reduces the threat of default.
9. They don't allow the borrower to get comfortable making late payments. They install a late payment clause in the contract and enforce it.
10. They are serious about their money and initiate foreclosure proceedings at the first sign of trouble. They are not childish in this area. They obtain the services of an experienced foreclosure attorney to handle the problem instead of trying to save a few bucks and "do it yourself".
11. They realize that a note is a depreciating asset. They understand that each month and each year the value of their note becomes less and less due to inflation.
12. They understand the time value of money and are able to answer these questions:
. How much is my note really worth in today's market? . If I decide to sell today for all cash, how much would I get? . Can I sell a partial of my note? . How fast can I get the money? . Who will buy it? . What is my risk factor in the long run? . What if things don't work out as planned? . What is my exit strategy? . Should I continue to receive monthly payments for the duration of my note?
These are considered some of the best reasons why some people are successful note holders and some are not. There are more, but these will make the greatest impact on you if you can emulate them. If circumstances in your life indicate that now is the time to convert your note into cash, please give us a call and let us help you.
Also, if you need to only raise a specific amount of capital, we can structure a partial so that you receive exactly the amount you need without having to cash out your entire note.
About the author:
Richard Wills is an expert in private Real Estate Financing and cash flow settlements. He is a former Licensed Real Estate Professional and Bail Agent for the state of California, as well as a noted author, professional coach and consultant. He has helped 100s of real estate professionals, attorneys, financial planners, business owners, accountants and others, in converting paper assets into cash. To learn more visit http://www.a-znotebuyer.com
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