All Forum Posts by: Charles Redmond

Bryan,

The notes would be used to finance the acquisition property, not notes. In exchange for the ownership of a property, the seller would receive a note, or similar contract, stating that they would receive their asking price plus interest at some future date. Again, the offer would not be appropriate for all sellers, particularly those who require an immediate cash payment for any reason.

I may be using some terms incorrectly so please feel free to correct me.

- Charles

Bryan,

The zero would be best suited for acquiring an inventory to be used for a retailing strategy with the notes terms not exceeding 12 months. Ideal sellers would be wholesalers looking to move a large portion of their inventory. I'm glad that you brought up the tax aspect as it is something that I hadn't yet considered.

In general, I really appreciate the feedback as the idea as basically just been floating around my brain for some time without any real outside input.

- Charles

Just to add, a explanation of how the note would be paid in full would ideally accompany any offer.

- Charles

Bryan,

It would have to be framed as a comparable but more passive investment. Such an offer would not look to mislead a seller in any way nor would it be appropriate for all sellers. A certain level of sophistication would be required to understand both benefits and potential risk.

- Charles

Bryan,

Thank you for the prompt response. Such an offer would not be framed as a cash equivalent although it can be perceived as a better than cash offer in the sense of ta seller receiving their asking price plus interest. This would be particularly true if these were to provide a risk adjusted yield exceeding any comparable investments (i.e reinvesting the proceeds into another property).

- Charles

Hello,

I can't quite remember how I stumbled upon this site but I definitely am pleased to have done so.

My background is in IT but I've had a strong interest in real estate finance for some time. I hope to use BP for receiving feedback on some non-traditional financing strategy's I've been researching.

- Charles

Does anyone have any experience using zero-coupon notes, or notes that don't make principal/ interest payments until maturity, to make acquisitions?