All Forum Posts by: Tim G.

Originally posted by Tim Gordon:

I'll bet it dips into the 9000 territory then we are back in business.

This isn't 2008 banks aren't bankrupt, automakers aren't toast.

Its almost time to go shopping for some deals.

Banks are still failing, just not as fast as 2008.
http://www.bankrate.com/finance/savings/2011-list-of-failed-banks.aspx

I completly agree, i just figured it was better than nothing for the moment :D . Ill keep doing what im doing, ill just not post it until I can find a real estate text books.
Any idea where I could find a text book. All the places ive looked at it seems I cant get a book without going to the school for the license.

I am creating this post to get a better understanding of the many different terms used in real estate in the hopes to further my knowledge and hopefully anyone else who comes across this site. As a newbie, many times i feel overwhelmed trying to learn the different techniques to REI and also learning the terms involved in each situation.

What I will try to create here is a post the will show the term, a link to a googled definition, possibly a bit of cut and paste from said link, and also I will try to put the definition into words that I hope anyone can understand. If possible, I will also try to give some type of an example.

I also know that as a newb, I will most likely put down how I see things and turn out to be wrong. In cases like these, I hope the communty will help me understand the concept better so that not only will i learn, but I will be able to go back and fix what I wrote. Thank you for any help you all decide to provide me, it will be deeply appreciated.

PS: Yes, I know i cant spell worth a crap :P

Seller Financing http://financial-dictionary.thefreedictionary.com/seller+financing
An agreement between a buyer and a seller of an asset, usually real estate, where the seller directly holds the debt. That is, rather than going through a financial intermediary such as a bank, the seller and the buyer conclude the transaction and the buyer makes payments on the asset at the agreed-upon rate of interest directly to the seller. This is useful for the buyer when he/she could not otherwise obtain financing. It can also be useful because the interest rate is often lower. Likewise, the seller can often receive a higher return on the sale of the house because he does not have to pay commissions or other costs to the financial intermediary.

This does not mean that I( as the seller) am giving you(as the buyer) 100k to buy my house. It means that after you and I negotiate the terms of the financing(downpayment, monthly payments, interest rate, lenght of the "loan"...etc) you begin making payments directly to me.(Although I believe a third party can be invlolved, generally a title or escrow company, that will handle the payments you(the buyer) make. Please help me if I have gotten this wrong so I can get it changed)

Note (If i understand correctly, its actually refered to as a Promissary Note?)
http://homeguides.sfgate.com/real-estate-notes-definition-2712.html

This is a note that basically states what the terms of the sale of the asset(in this case Real Estate) is.
Eg: http://www.usattorneylegalservices.com/promissory-note.html I think this example promissary note will explain it better than I could.

I hope to get one or two definitions done per day. I know some people may think its a silly idea, but if i try to do too many at one time, I end up taking even longer to cement these concepts in my mind.

Originally posted by Financexaminer:

Let's call it closer to what it is:

Seller (old tired, worn out landlord) sells with seller financing, note and deed of trust, or sub-2 or a contract for deed......and he gets a down payment or he gets some "free work out of you" as the management fee as an option price and he gives you an option and a master-lease. Keep in mind too, that your option and lease can be rolled over to another agreement like a contract for deed.

He gets a loan servicer to collect the contract payments.
The loan servicer collects the payment, takes his fee and sets aside funds to pay taxes and insurance (as well as any outher escrows required, like HOA fees, sewer assessments, etc.) and sends the balance due to seller his money.

Hope that helped...

Kinda, but im going to have to look up a few definitions and get back with you. Thank you.

Not to interrupt the flow here, but am I correct to think of a note holder as basically turning himself into the bank?

To help me understand the concept:

The note holder receives a down payment.
The note holder receives a check every month from the buyer.
The note holder goes to a note servicer who actually receives the payment from the buyer first, then pays the taxes and interest, then mails you whats left?
Is this correct?

Thank you in advance your help.

Welcome Tim, sorry this hit page 2 without anyone replying with so much as a hello!

Maybe I should say we don't know each other, that might help you get started here.
Ask questions! Lots of people to learn from here.
I for one will advise getting your RE knowledge from conventional sources, not from guru programs, they can get you in trouble in your neck of the woods!
Good luck!

Lol Not a problem, and as far as the gurus go, I think ill just stick around here for the time being. :D I found J Scott's website and have been reading it for the past hour or so. Im begining to think that guy could explain anything to a first grader and have it make sence.
Edit: What do you mean that following a guru could get me in trouble in my neck of the woods?

Sorry your first house was a dud. My first 2 didn't do much for quite a few years.
There are people here doing stuff. Read up and enjoy. Maybe something will click. You have time on your side, a very valuable asset.

I appreciate the vote of confidence. I think I should clarified that the first house I bought is actually the house im living in at the moment. Im in the process of an almost complete remodel, but that was only one of the things I just didnt even think about when I was looking. At least i can look at the mistakes i made then and hopefully remember them when Im finally able to make my first investment deal.

Good Afternoon Bigger Pockets. Im Tim and i've been lurking here for a few weeks.

Im from Carthage, Mo(about 13k pop.) which is situated between Joplin, MO(50k pop.) and Springfield, MO(160k pop.).

A little about myself: Im 27 and until a few months ago had never entertained the idea RE investing(or investing at all). An older gentlman at work suggested i read a book called Rich Dad/Poor Dad, and while i agree with what many poster here say about gurus, what i took from the book was a completly different way of thinking and looking at the world around me.

Ive seen my parents and my friends parents and many co workers struggle through the recent reccession, and thats why ive started reading and trying to learn. I dont want to end up like everyone else, struggling to survive at 50+ years old with nothing to sustain me when i retire. Im tired of struggling. Im not looking to get filthy rich, just comfortable.

Currently im layed off... as of 2 days ago, but i prefer to look at the silver lining. This gives me an opportunity to learn as much as I can through this site and anywhere else I can find useful info.

My biggest problem, i think, is that i have no knowledge of real estate outside of the house i bought when i was 21(and ooh boy did i make mistakes there), so im finding it difficult to find an actual begining(if that makes sence).

Sorry, didnt intend to write a book there, so ill just say this for now: Im actually a bit excited to finally signup here. Many of the posters seem to really care about helping and furthering someone elses knowledge and understanding about REI, and i hope to one day be able to use that knowledge for myself AND be able to become a useful addition to this community.