Over the last year or so there is a real estate investment strategy that has been gaining popularity. While you may have heard of purchasing REO properties from the bank, the current state of the market has given birth to a new way to obtain real estate investment properties at a significant discount. This strategy is known as bulk reo real estate.

REO stands for “Real Estate Owned” and it refers to a real estate property that was previously a security for a mortgage loan. The previous owner defaulted on the loan and the lending institution foreclosed on the owner and took over ownership of the property.

REOs are a problem for lending institutions. These institutions are not in the business of investing in real estate. They are in the business of loaning out money. When a property in their portfolio reaches REO status, the institution is losing money every day that this property remains under their ownership. Their goal is to get the property off their books as quickly as possible so they can go back to doing what they do best and that is lending out money to people. Banks also get audited once a year and if they have too many properties with REO status, the management team of the bank gets in trouble.

Normally when the bank takes the property back at auction, someone that works in the bank would either buy the property themselves or they would hire a real estate agency to list the property for them. The real estate agency will list the property at full market value, unless of course the property needs a lot of work. If the property needs work, the agency would discount the price accordingly to compensate for the work that is required to complete the work on the property. As such, the only way you can purchase REO properties at a discount is if you either have an inside contact at the bank itself or if you purchase from a real estate agency a property that needs work.

However, because of foreclosures being at an all time high, many institutions are finding that the current system of handling REOs is not working. They have too many properties that are being foreclosed upon and with a slow market, the real estate agencies cannot move these properties fast enough. As a result, the properties continue to sit on the market and the lending institution continues to lose money on these properties.

As a result, the lending institutions have come up with a new way to get rid of their excess inventory and that is through a process called bulk reo packages.

A bulk REO package is a group of properties that have been combined together and marketed as one package. The package may consist of actual real estate properties of all types and sizes, non performing loans for sale or a combination of both. The packages are usually grouped by geographical location, but can also be grouped by property type nationwide. The financial institution calculates how much each property is worth in the open market and then applies a discount, typically at 50 to 70 cents on the dollar.

There are two ways you can make money with bulk REO packages. The first way is if you purchase them yourself or put together a team of real estate investors to purchase them. REO packages typically start at $5 million and can be as high as $1 billion dollars. These deals can be purchased from the lending institution directly or a third party who is responsible for finding buyers. This individual is known as the sellers mandate.

If you have access to the type of money required to purchase a REO package, you can make a significant amount of money. The properties in the portfolio are going to be in a variety of different prices and conditions. Some of them you will be able to sell right away on the open market. Others will require work to be done before they can be sold. The discounts on each property may be small or very large.

Suppose you purchase a REO package for 5 million dollars. The package consists of 50 properties at $100,000 each that are worth $200,000 once fixed up and sold. Each property on average costs $20,000 to repair. There are several ways you can make money with this package.

You can immediately wholesale the 50 packages to investors at a profit. If you sell each house for $120,000, you are still leaving at least $60,000 profit for the investor that is buying the property from you. After selling all 50 properties you will walk away with over $1,000,000 profit.

You can fix up the properties and sell them yourself on the open market. If you invest $20,000 into each property for repairs, you stand to make up to $80,000 profit per house. After selling all 50 properties you will walk with over $4,000,000 profit.

Another option is to fix up the properties and keep them yourself. You can rent each property out to tenants and collect rent. Assuming each property is a single family unit and you can produce a positive cash flow of at least $200 a month, you can net a positive cash flow of $10,000 a month. This is of course assuming that the money that you invested into acquiring the properties was borrowed money. If you paid all cash for the properties and repairs, your cash flow could be as high as $100,000 a month.

You can also create lease options on the property and rent the properties to tenants with the option to buy at a later date. A lease option is a great strategy to employ in this current market as there are a lot of people out there that want to buy a house but can’t afford the down payment. The tenant pays you an option consideration at whatever price you decide. Should they later buy the house, the option consideration can be used as part of their down payment. However if they fail to buy the house, you get to keep the option consideration and lease the property to someone else.

What if you don’t have access to the large amounts of capital necessary to purchase bulk REO real estate? There is still another way that you can participate and profit from bulk REO packages. Sellers mandates are constantly looking for new buyers that they can sell their properties to. If you can find people who are interested in purchasing bulk REO packages and you can introduce them to the sellers mandate you can earn a commission not just on the initial package but any future packages the buyer purchases from the sellers mandate.

How much money is possible for helping to close a REO transaction?

Typically the financial institution will pay 3 points, which equals 3% of the final sales price for the package. Half of that commission will go to the sellers mandate and the other half will go to the people on the buyers side. If you are direct to the client, you keep the full half of the commission for yourself. If not, you will have to split your half with whoever else is on the buyers side of the transaction.

Suppose you find a sellers mandate for an REO package and you are able to refer a buyer directly. The REO package is worth 10 million. 3% of 10 million is $300,000. You would split the $300,000 in half, so you would walk away with $150,000 just for making the referral!

If you are dealing with a larger package, the commissions become even more lucrative. A 50 million dollar package with the same scenario would net you a commission of $750,000!

If you are going to get into the bulk REO game, now is the time to take action! These bulk REO deals are only going to be available for as long as foreclosures continue to remain a huge problem right now. Once the bubble ends and the inventory goes back to normal levels, lending institutions will go back to the normal way of handling REOs and there will no longer be an opportunity.

Real Estate Foresight, Education, Tools & Support Lead to Success

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This real estate investing article is thoroughly designed to re-introduce you to the post- bubble real estate investing world of today. Most of your old books, manuals, courses and education materials on real estate investing are severely deficient in addressing the new methods of real estate investing today; the principles haven?t changed but the methods and opportunities sure have.

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Today?s real estate investor uses technology, networking, mastermind alliances, asset protection measures, automated prospecting, buying and selling systems as basic tools to greatly increase efficiency and productivity. One rule however hasn?t changed: ?Buy Low, Sell Higher?

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Gone are the days when you buy one month and flip the next for fast profit. Today you?ll find bulk R.E.O?s, short-sales, wholesaling, leasing with options to buy, owner financing, loan modifications, deeds in lieu of foreclosure, tax lien investors and so forth. Look for more and more auctions and automated short selling systems designed to expedite the process of liquidating excess property inventories at rock bottom prices.

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Private money is king. Hard money lenders and people with liquid cash or dry powder as it?s called are in positions buying properties in some cases at 11 cents on the dollar! It?s already happening; bulk REO packages selling 50, 100, 500 or a 1000 or more distressed, repossessed homes at a time are selling to institutional buyers and wealthy privately connected buyers every day. Homes that on average originally sold to unqualified buyers for $85,000 now routinely sell for $6,500 when bought in bulk at 50 or more. That?s 50 x $6.500 or $325,000, not the heyday price of $4,250.000.

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Today?s investor is a lead generating machine, one who sifts through volumes of properties and parcels out leads in all directions depending on the method best suited to dealing with the property in question. The words ?A real estate investor gets paid when they solve a problem? have never been more true than today.

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Beginning real estate investors: Beware, the sharks are in the water and there is blood in the streets; bottom feeders are quietly buying the cream puffs in these deals and re-parceling out the dogs to the unwary. Take time to learn and understand before you begin buying. Learn from people who know and are willing to tell you how to approach these markets. Millions are being made but not by the uneducated and unconnected.

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Today is the day that you?ll understand whether or not you?ll use real estate as another road to wealth. Here is where I introduce you to a well traveled and mapped out highway to predictable prosperity, it?s time tested and been proven to work, let?s see if you can simply follow the map which will guide you to this new stream of income.

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I?ll be your opportunity guide, the person who directs you into the fast-lane while you methodically leave that old 9 to 5 behind. All success begins with a plan; real estate is just a tool you use in planning an overall approach to living a well balanced and satisfying life. Once you find your sweet spot in real estate you?ll be one step closer to succeeding with near perfect performance in an enjoyable and prosperous endeavor.

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Currently you?ll find that the world is on sale and everything is negotiable, your ability to find, negotiate, structure, manage and market real property is the key to cashing substantial checks along the way. As with any trip it pays to plan and prepare properly by first knowing and understanding the rules of the road while easily avoiding the obstacles and roadblocks along the way.

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If you?re currently employed then keep that position until your real estate profits overtake your monthly take home pay by twice your current salary, then bank six months worth of wages before you contemplate leaving that old 9 to 5 in favor of fulltime investing. You may even choose to use real estate investing as a secondary income stream while you keep the regular J.O.B. (Just Over Broke). It is suggested that you have seven independent streams of income in order to truly be insulated against unforeseen circumstances that lead to chapter 11.

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Rule number one is ?Keep your overhead low? Your new offices will be considered your car, your home and local public places, these are all fine venues to carry out general duties and are considered ordinarily acceptable work spaces for the mobile investor in today?s real estate game.

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Remember this phrase ?There are Riches in Niche?s?? and there are a great many specialties to choose from in real estate, you should strive to become a specialist in 2 or 3 areas of expertise but not so many that you fail to master the fundamentals of each niche. You don?t want to be a one trick pony but you don?t want to be the proverbial jack of all trades and master of none either.

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You have no doubt heard that all successful people are most often masters of time management; it will serve you well to learn from the best right from the start while you refrain from constantly searching for new mentors to teach within the same subject areas. Limit the amount of differing advice that you get from competing resources so that you can maintain your focus on one proven step by step approach that has already been proven to work by following an existing blueprint, there is no need to recreate the wheel, use existing systems to leverage and compound your success and progress.

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Start by finding a guide, someone who has already researched, found and verified qualified resources that are proven success models, from here you can begin building your team. T.E.A.M. = Together Everyone Achieves More. There is no such thing as competition; you should consider it co-opitition or co-operating competition. There is plenty of opportunity for everyone, don?t let a scarcity mentality spoil your journey.

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There is an old saying in real estate and it states ? You get paid when you solve a problem? seek to be a problem solver and a solution provider throughout your networks and areas of operation and you?ll find greater opportunities to be of service throughout the your day.

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Here are a few of the choices you have to provide service in real estate: bird-dogging, foreclosure investing, creative finance, seller financing, owner financing, no money down,? private funding, notes & mortgages, commercial, residential, raw land, judgments, liens, flipping, wholesaling, sub2, auctions, probate, lease purchase, options, tax strategies and a great deal more.

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The key is goal setting and we?ll make it easy, starting out with just 30 minutes a day to read one chapter of real estate educational materials to help you fully prepare within 90 days to begin doing profitable deals while saving you time, money and frustration.

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Believe it or not, it only takes a short while to understand the principles, cement the concepts, instill the fundamentals and begin to build your network while designing your plans and preparing to implement your strategy using precise tactics to own your specific niche in real estate.

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The entire blueprint can be found at www.BeARealEstateHeavyWeight.com? and it is guaranteed to work when you do.

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?by Barton D Fenton???????????

I don?t want to jinx it, but it seems like something is going on in the secondary market for REO. In the last 60 days or so it seems like wholesale pricing is firming up. A lot of buyers who abandoned the market last year during the values crash are coming back and nosing around. They are even starting to bid again. Dare we hope?

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There is no question that the prices for California REO ? the most sought after product in the Country ? have come up a bit. There is a substantial speculation that we may be getting close to the bottom of the decline and it is time to buy again. Even though retail values continue to drop ? albeit at a slower pace ? wholesale prices have increased slightly and appear to be stabilizing. The gap between wholesale and retail is shrinking somewhat and may be indicative of a changing market.

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As one battle weary Bank Trader put it the other day, ?Maybe the light we are seeing at the end of the tunnel isn?t another freight train coming our way ? this time?. One REO manager for a local Southern California Savings & Loan told me that they had no present plans to sell bulk REO because in March they had sold over 400 units through retail real estate brokers. He said that since they closed most of them above 90% of the listed price, there wasn?t any need to sell wholesale bulk portfolios. He suggested I check back in three months. Another Asset Manager said his company was pulling all of the newer REO assets also, and transferring them to retail real estate brokers. He indicated that they would be recompiling REO ?tapes? with only the dated units because the retail guys were having surprising success selling the more recent low-maintenance stuff.

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Have prices finally come down enough to lure the buyers back? It was only a couple of years ago the banks (pre-bailouts) were scrambling to obtain liquidity by selling off distressed bulk real estate assets at prices very attractive to investors. The most popular exit strategy was as simple as ?flipping? the product to another buyer or liquidating through auctions. Last year as values declined at twice rate of the previous year, the flippers started taking a beating. Values were decreasing faster than they could move the assets. The prudent strategy became ?buy and hold?. This year as the price plunge has noticeably slowed many investors are finding that they can now acquire assets at prices low enough that they can immediately rent them out at a positive cash flow. How long has it been since that was possible without heavy leveraging? ?

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The entrepreneurs are returning to the market with new ideas on how to create profits. Some are opting to creatively move product as ?rent to own? packages. The marketing is easy. There are plenty of potential clients and the pitch is attractive. ?Lost your home? Credit destroyed? Move into a new home as a buyer ? now -with a small deposit and payments you can afford. We will record your option on title so you can benefit from the tax advantages of home ownership and we will report your payments to the credit bureaus so you can begin to rebuild your credit rating immediately!? Others have found some success converting vacant apartments into senior housing. It is still a buyers market. The product is out there and with a little creative thinking and imagination the opportunities are, too. The innovations these people come up with is one of the things I love about this Country. No matter the circumstances, the entrepreneurs will find a way to make things happen.

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Dare we hope that light at the end of the tunnel is daylight and not another freight train coming our way? Summer is here and historically the next few months should account for something like eighty per cent of SFR sales. Bulk sales traditionally heat up around the same time and according to WCB CEO, Ralph San Roman, bidding is lively and almost any available bulk assets generates immediate offers. Locally, real estate agents are saying they are busy again and getting multiple bids above their asking prices. So things appear to be heating up. Is it just a small summer ?bump? or are we seeing the beginning of some stability returning to the market?

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Always the optimist, this morning I pulled an old sign my father gave me out of my garage, dusted it off and hung it up. The message is simple? ?Please God, give me one more real estate boom ? this time I promise not to piss it all away?.

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Amen.

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We all want to turn lemons into lemonade, but what’s the winning recipe in this decidedly downtrodden economic environment? Increasingly, savvy investors are finding ways capitalize on these historic conditions with REO property. First, let’s define REO. Simply put, a Real Estate Owned investment is property that has returned to the mortgage company or bank. This typically occurs after the bank has unsuccessfully attempted to sell the property at auction to recover the value of the loan.

It’s very common that these distressed properties are not bought, or even bid on, at auction because they are actually worth less than the value of the loan. In fact, being “under water” by owing more than the value of the home is why the original owner couldn’t simply sell the property and avoid foreclosure.

After the original homeowner misses mortgage payments and the home is not sold at auction, it is repossessed by the bank. This is when the property is classified as REO. At this point, the bank will negotiate with vendors and the IRS to remove liens and pay other items like homeowner’s association fees. If the original owner is still living in the home, the bank also handles eviction. Basically, they try to package the property and make it ready to sell.

Many of the REO homes are in less than pristine condition, with basic maintenance ignored and in need of many repairs before it’s ready for the retail market. The bank, not being in the business of fixing homes, will want to sell these assets in “as is” condition. This means you could pay a relatively low amount for a property that can be fixed and sold for a profit.

REO property offers the prospect of profits, but you must be diligent. REO offers both opportunities and challenges with additional issues including property preservation, title issues, code compliance, liability, the need for repairs before qualifying for financing, and turning a “fixer upper” into a home for the retail market.

Other issues are that banks can be stubborn and decide to hold on to REO properties for years instead of lose money on a deal. Or you might get a REO house for a real bargain, but see profits evaporate when repairs and renovation costs spiral.

One other way to make money from REO property is to bypass the banks and seek private investors who buy bank-owned REO assets in larger portfolios. Since these private investors negotiate with banks and buy REO investments in bulk at less than market value, you can shop around for the deal that makes the most sense for you.

Returns on REO properties from private investors differ, of course. But you could see around 15 percent ROI (Return on Investment) at the end of the project. There seems to be consensus among industry experts that “the long game” of buying, fixing, and holding property for eight or more years can provide an enormous return-allowing you to triple your investment.

Do your research, pick a strategy that works for you, and turn the lemons of today’s market into lemonade for your future.

Short sale transaction funding is most often used by financiers who are talented at getting bargain deals on foreclosure homes and then turning them around for a profit. At this time more folks have an interest in visiting this business, making it important to explain how and why this type of transaction funding is secured.

The idea of flipping real estate has taken on a particularly glamorous role as a method to get rich easily.

The definition of a short sale is when a home is about to be lost thru foreclosure and a deal is struck for an investor to get the home. The lender and the homeowner have to all agree on the particulars of the sale and the bank frequently walks out of the deal with less than they are really owed on the loan.

Usually, a stockholder will be offering to pay a negotiated amount of cash upfront so that the bank recoups some of its cash and the householder is off the hook and avoids foreclosure. Everyone is short changed a little, but the investor walks away with a great amount.

In order to secure that great deal, mostfinanciers will have to find some quick transaction funding to support their duty to pay for the property outright.

It used to be that finding non-public banks prepared to work in this capacity was difficult to find unless you knew somebody already in the business. If you have an interest in trying your hand at flipping property or perhaps just want to snag up a short sale property to live in yourself, the Net is your primary source for the best lending opportunities.

Morgan Foreman is a recommended expert in the field of foreclosures and short sales. He will show you how to get guaranteed transaction funding with no cash or credit needed. Do you need a proof of funds letter? Learn about Transaction Funding and check out www.WeProvideTheFunds.com

Selling Your Owner Financed Loan – FAQ

If you’ve ever taken out a mortgage with a bank then maybe you’ve experienced this: about 6-8 weeks after closing you receive a letter from a totally different lender who now has control of your loan and you are to send the monthly payments to them.

Well the original bank sold your mortgage or real estate note for cash to another financial institution that wanted a long-term cash flow investment. If you have “owner financed” the sale of your house with the buyer you can do the same thing. Sell your deed of trust or real estate note for cash to an investor who is looking for a long-term cash flow. There are lots of different names for a note: Deed of Trust, Contract For Deed, Mortgage, Loan, IOU, Promissory Note and others. For simplicity sake I’m going to use the term note.

Let’s say you have $80 in one hand and $100 in the other and I said you could keep only one. Well you’d keep the $100 of course but what if I told you you could have that $100 but it will be paid out at $1 a month over the next 8 years but you can have the $80 right now. Well that changes everything.

If you looking to purchase something really special for your family or to pay off some high-interest, nagging debts; maybe you have another promising investment opportunity, or you simply prefer not having the responsibilities and risks of carrying a Note. I can help you sell that note for cash to a buyer looking for a long-term cash flow investment.

Due to the current economic crisis, the price an investor is willing to pay for your owner financed loan has never been higher! If you are interested in finding out how much an investor is willing to pay for your real estate note call or email me today for a free quote.

For a more detailed description of the different kinds of notes please see the faq section of my website or a more in depth overview please download my free ebook “How To Owner Finance Your Home”

Here are some faq:

1. WHO BUYS NOTES?

There are various people and companies who like to invest in real estate notes instead of the stock market, commodities or apartment buildings. They could be a one-person operation, or an office of 4 or 5 people, or 20 people, or a big investment house of 100 people. I don’t put your note on a web site forum and hope somebody sees it or market to people right out of a “How To Get Rich Investing In Real Estate Notes Seminar”. I work with only reputable, long-term investors.

2. WHAT KIND OF NOTES ARE YOU LOOKING FOR?

I can help you find an investor for various kinds of Real Estate Notes:

? Single or in portfolios.

? Single Family Residential

? Duplex, Triplex, Fourplex

? Apartments

? Income Property

? Improved Land Contracts

? Recreational & Resorts

? Commercial Land Contracts

? Farm & Ranches

? Condos

? Vacant Land

? Bulk REO (Real Estate Owned) and real estate property portfolios

? Bulk mortgage note portfolios

3. WHAT IF THE HOME BUYER IS BEHIND IN PAYMENTS?

If you have a delinquent mortgage note I can help you. There are investors who will purchase notes that are behind in payments. If you are frustrated and not getting your monthly payments and just want to be done with the whole thing, I can help you find an investor who will purchase that delinquent note. This includes semi-performing (buyers are over 30 days late with payment) and non-performing (buyers are over 3 months behind in payments) mortgage notes. Get rid of that headache note and let someone else deal with it.

4. HOW MUCH IS THIS GOING TO COST ME?

There is no charge to you, the note holder ever. Getting a quote from an investor is free with no obligation to sell your note and the entire process is completely confidential. The borrower until the transaction is complete. The investor pays all broker fees.

5. HOW MUCH WILL I GET FOR MY NOTE?

This unfortunately I can’t answer, as there are too many variables involved. Each transaction is unique so an investor looks at several key factors for pricing. These include the type of property and location, down payment, equity, the buyer’s credit, how long the buyer has been paying you, and the terms of your note like interest and monthly payment amount. All that goes into their risk assessment and they make their offer based on that. Having said that though an average note will demand anywhere from 80 to 93 cents on the dollar depending on those factors.

6. HOW LONG WILL IT TAKE BEFORE I GET MY MONEY?

All deals vary, but normal closing time is 2 to 4 weeks once the investor starts their due-diligence process (inspection, appraisal, credit check, etc).

7. I JUST NEED SOME CASH NOW BUT I LIKE HAVING THE MONTHLY CASH FLOW.

There are a couple of ways to get creative:

Partial Purchase

A great option for note sellers because of it’s extreme flexibility and because in many cases it is possible to receive MORE MONEY than the original selling price. If you need cash right now but want to keep your note for the cash flow investment you can structure a deal so that you sell just a portion of your monthly payments for a certain amount of cash.

Let’s say that you sold your house for $250,000, the buyer gave you $25,000 as a down payment, and you now have a $225,000 note at 7% interest for the next 15 years. You want the monthly income but are in need of $50,000 cash right away. An investor could give you that $50,000 in exchange for buying “x” number of monthly payments, after which the note reverts back to you for the remainder of the term.

Split Partial Balloon

If your note has a certain amount of payments then a balloon payment at a certain date you can sell the payments leading up to the balloon and a portion of the balloon when it comes due. You get a lump sum of cash at closing and then receive a portion of the balloon payment when it gets paid off.

8. I HEARD I SHOULD HOLD ONTO MY NOTE FOR A NUMBER OF YEARS TO GET A BETTER PRICE.

This is called “seasoning” the note. The reason for waiting is that you are hoping to increase the equity in the house, which will help the note command a higher price. While this could happen other variables might decrease the price of the note the longer you wait.

It’s possible that maybe the property might devalue in price. What if the homeowners rack up a lot of credit card debt buying appliances, furniture, landscaping or remodeling and their credit score goes down? What if the homeowner loses their job and they stop making payments?

An investor looks at many things when assessing risk on a note and how old the note is is just one of them. A 3-year-old note with a bad credit score might be priced less than a 3-month-old note with a great credit score all other things being equal. Every note is different. Brand new notes and 20-year-old notes are sold everyday.

9. CAN I GET CASH AS SOON AS I CREATE THE NOTE?

Yes this is called a simultaneous closing, where a few days after the close of the house with the buyer you receive a check for the note. If you’re going to owner finance your home and you know you want to sell the note this is a great way of doing it because the investor is there for the initial process and you don’t have to start over again 6 months later with another appraisal, inspection, credit check, etc.

10. HOW MUCH DOES THE NOTE HAVE TO BE FOR?

The minimum is around $100,000 if it’s under that then it’s really not worth it for the investor. So a note could be for $100,000, $250,000, $500,000, $800,000, $5 million and everything in between. There are all different kinds of investors looking for all different kinds of note amounts.

11. CAN I SELL MY 2ND LIEN NOTE?

If you have a 2nd lien, where there is a bank or another investor with a more senior lien

against the property, you may be able to sell the note, but the price that you receive won’t be nearly as high. You generally won’t be able to sell those types of notes at any sort of decent price unless the buyer has put in at least 30% of his own money as a down payment or in built-up equity and has fantastic credit. Unfortunately investors just aren’t interested in 2nd lien notes or mortgages right now.

12. IF I OWNER FINANCE WON’T I ACTIVATE THE DUE-ON-SALE CLAUSE IN MY MORTGAGE. AND IF I’M ONLY GETTING A SMALL DOWN PAYMENT HOW WILL I PAY THE BANK LOAN BACK?

The Due-on-Sale Clause is a provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home. It is probably the most talked about, feared and misunderstood topic in real estate.

The link below is to a great article by real estate lawyer William Bronchick and will dispel any misunderstandings you may have about the due-on-sale and suggest a simple, yet effective strategy to get around it.

There Is No Due-On-Sale Jail

If you’re thinking about owner financing your home you can also do a simultaneous closing, where a few days after the close of the house with the buyer you receive a check for the note. If you’re going to owner finance your home and you know you want to sell the note this is a great way of doing it because the investor is there for the process and you don’t have to start over again 6 months later with another appraisal, inspection, credit check, etc.

13. WILL THE HOME OWNERS HAVE TO REFINANCE?

When an investor purchases your note, all terms remain the same. The only thing that changes is where they send the payment. If fact the borrowers are not contacted until the transaction is complete.

14. HOW DOES THE NOTE SELLING PROCESS WORK?

You’re interested in finding out about to selling your note. Give me a call or email and I’ll get some information about the property and note from you. We can do it over the phone or I can email or fax you the form. It’s an easy 2-page worksheet you can fill out in about 10 minutes. It asks for the loan balance, interest rate, length of loan, and basic information about the property. Then with the information you gave me I look for an investor who is interested in buying your note.

If I find an investor who is interested they take 2 or 3 days to crunch the numbers, assess their risk and see if it’s a good investment for them. If they are interested they make what is called a soft quote, which is their best offer before having reviewed any supporting documentation, such as the payee’s credit report and property appraisal. The quote will state something to the effect: “subject to review of credit – assumes good credit” but pricing should not change that much unless the property value comes in low or the homeowner has a low credit score or subsequent documentation does not support the information provided on the worksheet.

If you accept their offer you’ll draw up an option of purchase and sales agreement with the investor. The investor then starts their due-diligence on the property and the homeowners. Just like selling a house — home inspection, appraisal, credit checks, copies of legal documents, payment history and verification of current balance. This enables the note investor to verify the information provided, analyze the risk, and confirm their pricing of the note.

Once all the T’s are crossed and I’s dotted and contracts signed the investor takes control of the note and the title company sends you a check.