All Forum Posts by: Drew Poniewaz

@Scott Wolf

Sure. I used private money to purchase the property $27,000, at 8% interest on a 5 year term. $2160 per year, which I pay monthly at $180.

I sold the house seller finance, for $45,000 with a $2000 down payment. And carried a $43,000 balance.

Borrowers monthly payment is around $650

Out of the $650,

Private lender gets $180

Taxes $86

Insurance $127

Loan servicing $35

That leaves $222 per month for me.

Not only do I have $0 in the deal but I got paid the $2000 down payment.

@Lewis Hunter @Bill McCafferty @Fred Moskowitz

I would love everyone's thoughts on this. I have been assuming that the fair market value is the UPB of the note. Since my IRA owns the note and not the property. Great question.

@Sean Dougherty

With note investing you’re typically not in contact with the borrower until after you purchase the note and then enter into the loss mitigation phase. If you have contacts with home owners in the pre-foreclosure stage and their bank is smaller, you might be able to leverage that information to contact the bank and see if they would be interested in selling you the note instead of dealing with a short sale or foreclosure. In that case you would be in a position to work it out with the borrower.

Sub2 does seem to be an very viable option here. Most people are trying to leverage other people's money when buying notes. With sub2 you are using the banks money.

@Skye Penland they already broached it. Now it's just up to you to let them know some benefits. They also stated a big one which is capital gains. If you offer to pay them over time, their gains tax every year will be smaller. The longer you can spread it out the lower it would be every year. A common mis-conception is that it lowers their burden but it doesn't. It just delays it. Another point is they can use it as an income stream. Something that they know will come every month.

Investment Info:

Single-family residence note investment investment in Ferguson.

Purchase price: $27,000
Cash invested: $1

I used private money to buy a property, then sold it with owner finance to another end user and keep the spread.

What made you interested in investing in this type of deal?

Phenomenal way to cash flow without dealing with tenants.

How did you find this deal and how did you negotiate it?

Hud Property.

How did you finance this deal?

Private Lender

How did you add value to the deal?

Created an opportunity for a buyer that was unable to secure a traditional loan.

What was the outcome?

Performing cash flowing note. Steady stream of income for an investor.

@Gil Ganz

I have been doing it in St. Louis. It is a great strategy.

@Dustin Bank

How’s everything going? Were you able to make any connections? Have you been able to move forward in this crazy time? Reach out to me anytime.

@Ned Carey

Very interesting. Yes I will ask my CPA. I wonder if an installment sale is considered a loan?

@Shakiah Naverre

After holding for 6 months, you can get a private lender to refinance the loan. You will usually have to pay a bit higher interest, but being able to redeploy your cash is worth it. Obviously being careful not to over leverage yourself.

@Ned Carey

That’s interesting. I’ve never heard of the IRS requiring interest. I will have to check with my attorney on that.