Thanks for the specifics Dion DePaoli - the figures I posted were probably off in a few areas, I was really more concerned with overall concept as what I posted was simply an example, not an actual note. My ultimate goal was to figure out how to structure a win-win note and sell a portion of the payments. It seems like I'd be better off either 1) selling the whole note or 2) using the note to secure a loan.
Eventually I'd like to get into paper and away from rentals, wholesaling & rehabs. What I've found so far is that there's not a lot of good (read: thorough) study material on note investing and much of what I do find looks, to me, like the speaker or book writer or poster is leaving out key pieces of information either intentionally or unintentionally. It's either that or the books are sales pitches or are more about buying "bad" notes - which is not my aim. I prefer to have happy long-term tenants in my rentals. I prefer to rehab my properties in a manner that reflects how I'd like to have my home remodeled. I won't turn out a shoddy product just to turn a buck because I'm a firm believer that karma or the legal system will bite you in the ***.
What rubs me the wrong way is when someone like Bill Gulley makes assumptions about me as a person by saying, "your 'I'll foreclose take it back and do it again' tells me two things; 1. you are not aware of the legal aspects of lending and 2. that allowing your buyer to fail is not that much of a concern to you". Bill - 1) if I were aware of the legal aspects of lending, I would not be asking questions like, "What happens if the borrower defaults? What is my obligation to the purchaser of the other half of the note." 2) The statement that I'd foreclose, take the property back and do it again is a statement that I will simply do whatever is necessary in order to get the asset back on track and as far as I'm concerned, foreclosure is the absolute last and final step after all other avenues have been exhausted. Much like in a rental property, the last thing I want to do is evict a tenant and incur turnover expenses.
Bill, I also read the entirety of the "What do you want Mr. Note Buyer" thread, I'm now reasonably warned in that I shouldn't pay too much for and/or over-renovate a condo in CA and that creating some form of note in 2012 proved to be problematic for Alfred - also that he was eventually able to eventually sell for a loss to a cash buyer. I saw quite a bit of speculation on SAFE and Dodd-Frank but I don't remember seeing anyone actually quote real experience with either - as such I skipped over any comments concerning either and will seek advice from the active investors in my REIA and legal counsel. What it looked like to me was an 11 page wild-goose chase where one person was trying to offer sane advice based on real-world experience to someone truly in need of that expertise and a couple of other folks that like to constantly blow their own horns.
In the end, I had far more luck calling Texas based note investors and asking them pointed questions, offering to take them out for lunch or pay them a consulting fee for an hour or two of their time just to get some insight into a corner of the real estate industry that I'm interested in getting into. Most were willing to answer a few questions, several went in-depth on the ins and outs of what I was interested in doing and I was able to glean a few good pieces of information. There looks to be a couple of seminars in Texas on notes that I've been able to track down so far - Eddie Speed seems like one of the big fish and Tom Henderson looks like he does small one-off seminars and speaks at his local REIA meetings. I'll start with those two and see how far I get - eventually I'll find my groove.
Bill - you go ahead and get the last word on this thread, I don't mind..really.
