You can get a FREE NOTE!!!

It is fairly easy to finance more than you paid for a note.  Risky business on real estate, but not so much with a note.  Let me give you an example.

A buyer purchased a house for $60,000 and put $12,000 down and seller created a note for $48,000.  Buyer made all of the payments for 7 years and then something in his life changed and he stopped making the payments.  Owner of the note just want out of the deal and sold the note for $12,000.  This is not an unusual price for a Non Performing Note.

Buyer of the note reached out to the borrower and was able to renegotiate the note and modified it by adding back interest on top of the outstanding principle balance for a new balance of $52,000 and financed it for 240 months at 10% and a payment of $$501.81/month.  The note holder borrowed $24,000 from and investor and gave a security assignment of the loan for 12% and payments of $264.26 per month.  

Note holder put $12,000 in his pocket and still received $237.55/month.  WIN - WIN - FOR EVERYONE.  As always, be sure and work with an attorney and your CPA when doing this type of transaction.  Small price to pay.  There are other ways to increase your yield even greater.  So easy that a caveman can do it. (Assuming he has a financial calculator.)

I would love to have your comments and questions relating to notes.