building Cash Flow Without Cash - formula 5 "Flipping Paper"

Apartments For Rent In Pensacola Fl - building Cash Flow Without Cash - formula 5 "Flipping Paper"

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You've heard of flipping houses, haven't you? This has become familiar over the past years, generally because of many Real Estate "Gurus" teaching seminars, writing books, selling tapes, etc. There's even been some bad connotations from discrete forms of government; primarily because they don't understand it, instead they believe & do anything the Banking commerce tells them to do. I don't mean to get off on a political soapbox; however, the kind of house flipping I know about and have written about is perfectly legal and if done right, benefits all parties.

What I said. It isn't the conclusion that the true about Apartments For Rent In Pensacola Fl. You read this article for information about a person want to know is Apartments For Rent In Pensacola Fl.

Apartments For Rent In Pensacola Fl

So what about this "Flipping Paper" thing? Well, it's a lot like flipping houses. It is also quite similar to being a Bird Dog for house-buyers, as I discussed with you in one of last week's articles.

What I'm going to discuss with you now is exactly what I did when I first got in the paper business. I took a argument taught by Mike Meeker, a familiar and exquisite teacher, who I believe is now retired from teaching. I also believe he is living in Florida, or was when I last had perceive with him.

Anyway, back to our story. This was back in the late 1980′s and I had no money ready for investing. Here is the concept: You want to find Real Estate "paper" (Land Contracts, Trust Deeds, Mortgages, Notes) that is "For Sale" or will become for "For Sale". To make it simple, let's just call all these different types of paper, "Notes". You are seeing for Notes that were created in an Owner-Financed sale of Real Estate. Because of today's market, these types of notes are plentiful; however, in any kind of store there will always be these "Private" Notes ready because many buyers can't qualify for Bank Financing and many properties won't qualify for Bank Financing. To give you an idea of today's market, just take a look at any major newspaper's "Real Estate For Sale" section, and look for those ads that state "Owner Financing", "No Bank Qualifying", "Special Financing", etc.

Trust me on this point; there will always be hidden Notes ready and many of the owners of these notes would rather have a large chunk of cash Now rather than monthly payments over X whole of years. Also, there are and always will be hidden Investors (and sometimes big company investors) who buy these notes. Why? Because practically All hidden Notes can be bought at a gigantic discount. Why? Because of the greater risk involved in these non-qualifying buyers and/or properties. In fact, I have never seen or heard of anything who would pay 100% on the dollar for a note.

So let's start putting this together. Remember, you are going to function as a "Middle Man", not-unlike the "Bird Dog" mentioned earlier. Here's how we get started:

Find the Notes. There are numerous sources; such as Realtors, Title Companies, Real Estate Attorneys, etc. You can run a short ad in your local paper, such as - "I Buy Real Estate Notes" or "Top Dollar For Your Real Estate Note". If you scan the ads you may see other citizen seeing for notes. Don't worry - There are adequate to go around.

You could also look for ads offering "Owner Financing" in order to sell a property. Call the person, then ask them if they might want to sell their note after they close on the sale.

So let's say you find a note for sale, what now? You need to have funds ready to buy the note. Where do we get that? How do we know how much to pay for the note?

Just as we discovered how to find and buy Real Estate paper, which we will refer to as "Notes", we will more or less use the same tactics to find person whom we can flip these notes to, for a profit. Good sources are Realtors, Real Estate Attorneys, Cpas, Financial Planners, Stock Brokers, Loan Officers, etc. However, the best probable way is the old "Ad in the Newspaper" formula. You could advertise with words like "Real Estate Note For Sale" or "Investor Needed To purchase Real Estate Notes". Check the newspapers and Yellow Pages for ads like "We Buy Notes" and/or "Top Dollar For Your Notes". In other words, look for the same ads we saw and used to find Notes to buy & flip.

When you find an Investor or Note Buyer, you need to conclude the requirements and perimeters of the Note Buyer, such as:

What kinds of properties will they accept as security for the note? For example, single house houses, Land or Lots, Apartments, commercial Property, or mobile Homes with or without Land.

What kinds of minimum yields do they want from the notes they buy? This will vary based on many factors, such as security for the note.

Investors will want greater yields on higher risk notes. For example, a note secured by a single Family, Owner-Occupied (with exquisite pay history) would probably need the bottom yield, let's say 12% return on the investment. On the other end of the scale might be Raw Land, wherein an investor may need 18% or 20%. In this article I'm not going to get into how to guess yield. I will, however, propose that anything interested in these types of deals purchase a good financial calculator or software.

Examples of other things an investor may need are Title Insurance, Appraisals, reputation Reports, Casualty Insurance, etc. These things discussed above need to fit the investor which you may be dealing with.

Ok, so now we have found a note to buy on a single house house. The face whole of the note is ,000 with 10% interest payable monthly over 20 years. You know that the "Going" investor yield requirement for this type of note is 12%, which you could sell this note for ,115. So for you to make a profit of, say ,000, you offer and get approved a bid of ,115. You should surely get a written ageement to buy the note from the owner, preferably an "Option To Purchase". You have to keep in mind who is going to pay things like Title Insurance, end Costs, etc. If you are going to pay for these costs, you best subtract the whole of these costs from your offer to the owner of the note. Investors do not commonly pay these costs.

What you are going to do is have a "Double" or practically simultaneous end wherein you will close with the owner of the note first. Then a few minutes later you close with your investor who is buying the note. The closer(s) will then disburse the funds; ,000 to you, and ,115 (less Title assurance fees & end costs) to the note seller. Actually, I found it works best if I paid these costs and bought the note at a lesser price, say ,500. Sometimes when citizen go to a end they become unhappy when they realize they're receiving less money that they understanding they were going to.

I know I've covered a lot here that seems complicated, and it is - a little; however, once you've done a few deals it becomes routine. I remember when I first started trying this. I became discouraged and it took me a few months to close my first deal; however, since that time I would estimate that I've bought and sold over 6,000 notes - And most of those, one at a time. Of policy once my volume increased I hired citizen to help me.

The note company is a great and very intriguing career; Something new or different all the time. One thing I want to stress is that it is very important to have that duplicate end so that you surely own the note, even if only for a few minutes, before you sell it to your investor.

I will be publishing a book in the future, showing in detail how to thrive in this great business. I will be selling the book for a nominal price, which at this time I haven't determined. It will depend on how much time I put into it; however, I want it to be as unblemished as I can make it. I'll tell you this, if a person enthusiastically gets into this business, the company will always be there with exquisite financial returns.

These posts are the understanding of the author who is not engaged in rendering legal, accounting, or investment advice. If such guidance is required or desired, the services of competent professional persons should be sought.

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