All Forum Posts by: Scott Arpan

The June issue of The Paper Source has a count of notes created in each state. Texas lead all states with 19,808 followed by California (10,737) and Florida (9,316). These are first position notes of $30K or more. There are more notes if you expand your parameters.

I don't have any first hand knowledge of Donna Bauer's program. I occasionally come across her students who seem impressed by what she offers.  

Mike,

Here is an Excel based payment tracker I use for notes to small for servicing.

http://da.nccdn.net/media/westcoastequity.com/publ...

Part of the equation is why do you want to seller finance while anticipating selling the note instead of waiting for a qualified buyer.  If the property or market has problems that require seller financing, the investor will require a healthy discounted yield to compensate for the extra risk. If the market will not support the $125,000 sale price or the down payment was made outside of escrow, you will have a much larger discount and lose potential note buyers.

If you can't use the cash right now and prefer earning interest or want to defer capital gains taxes, meaning there are not any real issues with the property or market conditions, you might get an investor to discount the note only to yield 8 - 10%.  A 25% down payment is strong, you will want to review the buyer's credit to make certain they have good credit.

You will also need to check to see if you need an RMLO to create a compliant loan. Developers are required regardless of the number of notes they create. The rules regarding flippers and rehabbers have not been interpreted yet to be definitive as far as I know.

I don't think most people in OR or WA worry about the damage and disruption a huge earthquake will cause. This article is receiving lots of press here in Portland today. Next week it will be forgotten by most. 

I will bet investors will continue to make certain their properties meet current earthquake standards but nothing more. I don't think earthquake insurance is affordable for small investors. They could lose many of their properties when the big one hits. I don't know how many home owners carry earthquake insurance with a carrier that has the financial strength to pay out all the claims. FEMA's assistance to property owners will somewhat depend on the political climate in Washington DC at the time.

Bottom line, there will be a lot of great opportunities for those with cash to buy up all the damaged properties.

As I note investor, I know some of my collateral properties will be destroyed and worthless.  My loans are spread out over enough states with lots of discount on the purchase price. I  don't lose sleep worrying about natural disasters effecting my investments.

Daniel,

Direct mail works fantastic once you get synergy by sending out regular mailings to a large number of prospects. I don't know anything about mailing to your particular market. In general you want to be sending out thousand(s) of mailers per month knowing at best 3% will respond and maybe 10% of the responders have good transactions and are willing to close with you. 

Cody,

Ideally IMO you will want to convert the contract to a trust deed and note before buying the contract. Not an absolute requirement, but taking title as the owner and passing it to the vendee after the contract is fulfilled is riskier then taking a lienhold position in the property.

There are a lot of unknown variables to give specific comments on your contract. In general, for an owner occupied office building probably 50% ITV and 12 to 16% discounted yield would be in the ball park. This assumes it is a typical “C” office building commonly sold on contract.

If you have an A or B type building that cash flows with other strong tenants and has good property management with a solid documented pay history and personal guarantee from the attorney/borrower who has an established practice and great credit, you would get a lot more.

 Phillip,

Yes you can pledge your notes for a loan. IMO the best lender will be a bank where you have an established relationship that is local enough to feel comfortable with the collateral and small enough to give your request serious consideration. I am assuming you don't have a portfolio of notes large enough to interest a larger regional or national bank. 

Hope this helps

Dave,

Experienced note investors will care if you bought the property for half of your resale price, even if you rehabbed or put in a lot of sweat equity. 

You may have an excellent deal where your resale price is totally legitimate. However, the note investor will question why are you willing to walk away from so much more profit by not selling to buyers with conventional financing. They will question your motivation of leaving so much profit on the table.

New note investors may not care what you paid for the property but eventually they run into a deal that puts them out of business.

Don't worry about finding note investors. You will likely start receiving letters from experienced and newbie note investors a couple weeks after you record the transaction.

Good Luck

Jack,

Land notes with someone developing the land would be a tough sale until the construction is finished. This assumes you are in first position and the builder is going out of pocket to develop the parcel. 

If you are subordinating your note to construction financing there would not likely be any buyers for the note. In this case, you would need to wait until the property sold at a profit to get paid off. If the buyer is rolling over their construction loan to a permanent loan you will want to make certain they must pay you off on the conversion.  

@Parth Patel

Lists will be your best and easiest source. You can also look for listings, especially FSBOs that mention owner will carry (owc).