All Forum Posts by: Account Closed

@Jay Hinrichs Is it possible/common to hypothecation a 2nd position note?  I suspect not.

@Mason Keeler How did the flip turn out?  How has your transition from stock market to real estate be doing?

@Adam Johnson - A strategy I have been doing is loaning rehab funds via 2nd position note recorded on the properties trust deed.  I have some that are in the later phases of the rehab and serves as strong collateral ranging 15-19% interest.  Feel free to reach out if you are interested. 

@Rodrigo Serzedello

I don't have a dog in the fight but I don't see many options presented here that would yield $2500/month cash-flow without owning/managing anything.  I prefer to loan on projects on the west coast at 15% interest in the Portland OR. metro area.  

@Alex T.

Thanks for sharing Alex.  What a title mess.  Keep us posted...

@Shiloh Lundahl,

That's exactly what I have been doing for about 5-years now in Portland OR metro area. I'm getting 15-19% return on my self directed retirement accounts (401k->IRA and ROTH) and it's stacking fast. Why not stocks? I had two S&P 500 mutual funds in two different accounts. Over the course of 8 years or so getting out of the recession, one of my accounts almost doubled while the other had hardly any gains beyond what I was contributing. Ever since then I been doing it my self.

@Robert M.

I have had a lot of success with loaning funds for rehab projects.  My process is as follows: 

1. I underwrite the project based on how much is owed (via a title company) on the first and a conservative resell value.  Typically my funds are covered around 250%, i.e. in a foreclosure wort case scenario my second position is covered twice and then some.  I am able to do this because I am familiar with the Portland Or. and metro areas.  
2. Terms are about 6-month or longer depending if you need the money at maturity or later.  I review the promissory note (typically 6-months at 15-19% interest) and sign at your bank to notarize.  I email the note to the title company to record and wire the funds to title.  
3. I then sit back and count the daily interest until the home goes pending and the title company calls me find out where I want them to wire my principal and interest.

I have been doing this for over 5-years and it's much easier than other forms of real estate investing by far.  In fact I sold two rentals and pooled the funds into one note on an RV park and I could live of off that interest alone if I chose to retire.  Anyways, keep well Robert and let me know what strategy you ended up doing.

@Alex Alanis

Not sure what your ambitions, goals, risk tolerance, or timelines but I've had a lot of success doing promissory notes collateralize by real estate in my back yard. Turns any nest egg into a NNN lease secured with west coast-metro area collateral.  With that capital I'd rather earn $1,800 a month doing nothing then buy into an out of state project but that's because I already have a day job.

@Jacob Lapp

TLTR... My 2 cents to your original post.

I like to use bogleheads dot com for stock market discussions.  Getting back to your question you may need to know what your goals are and timeline.  Scheming for a quick return in the stock market is tough since most of the time the stock value is emotion driven and not value driven.  

@Corey M.

The accreditation thing comes up because the fed. government has safeguards in place to help prevent novice investors from losing more than they can stomach.  To be accredited investor you need to show $1 million of net worth excluding primary residence or something.  You can look up the specifics.  I looked into both options you presented but ended up doing promissory notes collateralize by real estate.  You get a fixed return (15-19%) and your principal is on the deeds title like a bank.