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Updated about 11 years ago,
Structure a note for highest resale
Hi everyone, My first post here.
I'm from the UK and will be investing next year into the US. I'm still learning loads and BP is a great site!
I'll be using my own cash to buy real estate, and I have the ability to create my own note on the real estate I am buying. (I'm thinking... I start two companies: company B buys the property for cash, then company A lends money to company B creating a note on the property... however there could be a better way)
For example: Company B buys a property for $100K... After purchase, Company A lends Company B $80K. Interest rate could be 12% or higher (as cashflow on the real estate is good). Payments are made on the note for 6 months.
Questions...
Could that $80K note sell for $80K ? if not .. how close could we get?
What could we do to increase the value of the note? (Time to season, LTV, any specific terms to be in the note?).
Rather than one note, could we do this with 2 notes at 40% each ? (or 3 , 40%, 40% & 20%)
Is there a way for Company B to use Company A's money to buy the property and create the note at the same time?
Basically... How could I create a note buyers dream note?
Lots of questions... so thanks in advance!
Sunil Kumar