Another Money Making Partial Technique - Continued

Go to PARTIAL TO PARTIALS to learn how to make a bundle and increase your yields to astronomical levels.

In the last issue, I pointed out some tricks note buyers will use to try to convince you that you would be selling your note for no discount. If you want to learn the exact math, go to FOR THE GREEDY ONLY, and DOUBLE YOUR YIELD WITH HALF AND HALF. There are note buyers who make a fortune from these techniques.

Now the NOTE PROFESSOR will give an example where it makes sense to sell a partial of your note. Suppose you are a rehabber who bought a property for $30,000. It took you $10,000 to rehab, and you are trying to sell it for $70,000. You have found a buyer, but because of seasoning, appraisal, or the credit worthiness of the buyer, they cannot get financed. You have a hard money loan that is eating you up like Pac Man, and really just want to get out from under and move on. What can you do.

Why not sell the property for $70,000 with the buyers putting 10% down. (Demand more if need be. Remember, the more down, the more money in your pocket) You will then carry a note for $63,000 @ 10% for 30 years. This will make the payments $522.87. Since you just want out, you determine how many payments you would have to sell to give an investor a 12% yield, where you would break even. With your handy dandy friendly neighborhood financial calculator you determine you can sell 96 payments, or 8 years, and receive $34,016.83. Combine that with your $7,000 down, and you have practically broken even. At the end of 96 months, the balance of the note of $58,925.92 will be yours. Go to PARTIAL TO PARTIALS and HOW TO DETERMINE THE BALANCE OF A LOAN to see how to arrive at these figures. Yes, I know there are closing costs, I am showing concepts here. In the real world you would determine all costs before selling your note. When I go to sell a note, I always ask what can I sell a partial for. Often times it just makes more sense to sell only a partial.

For example, if you want to know how to acquire NOTES FOR FREE, to put into your retirement fund, go to HAPPY TAILS TO YOU. This is nothing more than another way to utilize partials for big profits.
What can be more profitable than having no money into it
?

As always, remember there are tax and legal consequences to buying and selling notes. If you do not have a competent tax and legal advisor helping you, you ought to be taken out of the investing gene pool.

HAPPY HOLIDAYS. Here ye, here ye. I am putting THE NOTE PROFESSOR NOTEBOOK on EBAY for the HOLIDAYS. It would be the perfect Christmas Gift for investors…Then you can borrow it? J Just go to EBAY and type in NOTE BUYING. If all have been purchased, try again in a couple of days. To save on expenses, I am putting only a few for sale at a time, so keep checking.

If you have any questions, please contact me. It is from your questions, that I get the material for my articles.

 


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