All Forum Posts by: Marc Faulkner

I should have given you a little more meat with my first post."You make your money when you buy" a mobile home for the right price! Buy cheap, sell at retail and owner finance the sale with a decent down payment and a decent buyer. Typical rate on seller financed mobile home notes are from 10 to 19%. If you buy for $10,000 and sell for $18,000 and get 10% ($1,800) down you will only have $8,200 into a performing note that is paying a way better than average rate of return!!!
In my area we are now buying stick built homes on land for what we were paying for mobiles in parks just 3 years ago..... If you are working with mobile homes that are in parks it is of upmost importance that you keep the combination of the lot rent and home payment competitive with market rents.

You're right Dick!
Welcome to the group Dariuce. There is a lot of expensive materials and classes/seminars you can attend regarding the note business. I suggestes Lonnies books as a start and you can buy those right here on this site for cheap! The one constant in the note business is that it is always changing! Education is key. If there is anything we can do to assist with your note business I would welcome the opportunity to work with you.

I would require the sellers of the toxic mortgages to send out "Good Bye" Letters to each payer and attempt to get estoppels.
From there you need to send out letters introducing yourselves as the new note holder. Then do follow up calls and interview each payer.

When working with a note broker it is important to find one that has experience and can actually deliver. It seems that there are bunch of graduates from some late night TV seminar that "list" notes and do not have relationships with any investors. These notes get overshopped and this weakens the price by making the seller look desperate or like they don't know what they are doing. A good broker will add value to your offering and create competition around your sale.
Ask how the broker intends to market the note and if they mention "listing" it for sale on any website-run for the hills.

Investors buy notes at a discount from the current principle balance and then collect the payments. Some investors pool up these single notes and sell off pools to larger investors for a profit once they have created some seasoning. There are all kinds of ways to invest in notes. Investors create their own yield (and security) by the discount offered! Some use borrowed money or warehouse lines of credit to buy with and make money off the spread!

If you do a wrap can you sell it for enough money to pay off the underlying first position mortgage note? If the answer is yes then it may make sense!

We buy and sell mortgage notes in the secondary market as our primary business since 1999. Our focus is on first position, performing real estate notes secured by residential and commercial properties nation wide. We welcome new brokers and would look forward to working with you.

I would suggest [REMOVED] and "Making Money With Mobile Homes" by Lonnie Scruggs. This will give you a lot of great "back door" information regarding the real estate note business.

What you have to make sure of is that there is enough room in the wraparound note that you can sell it at a discount and stil payoff the underlying firts position mortgage note. Now the wraparound note is in first position for the note buyer!

I would charge a rate closer to 10% so that you do not have to take such a big discount when you sell the note. i also agree with Jay in taking back 2 notes but, I would not do the wrap dollar for dollar with the current mortgage. I would do it for 80% of the sales price and take back a 2nd. for whatever under 20% the buyer does not have and I would try to keep that as small as possible. The first will be well secured at 80% of the current market value as long as the buyer has at least 10% real skin in the game. With decent credit and seasoning you will not have a problem getting a good price for your note, paying off your underlying note, keeping the leftover and the 2nd. for cash flow!!!!