Newsletter Hip
H & P Capital Investments LLC
Issue 21
March 2007
Successful Note Deal
note deal

I just closed a 1.2 million dollar note on land and building in Oklahoma . The payor and property had great attributes. However the paper, mainly the title and deed, were riddled with estate issues and incorporation complications, which resulted in 2 investors choosing to pursue other deals. However with my national network of note investors, I was able to find just the right ones who stayed with the situation as I untied knots and solved all the gliches. When the smoked cleared all participants left the closing at the title company happy. One walked away with a bag full of money and the other had profitable real estate note in hand. Another H&P Capital Investment LLC Note buying/selling Sucess.

If you have a note to sell, Click here for more information

Participation Mortgage

A loan that allows the lender to share in the income and/or resale proceeds.

Note Professor Notebook

To enhance your knowledge of creative real estate financing and note selling.

Click here for more information.
Note Worthy Convention

Many of you have asked me how to broker notes. There is no “magic bullet” that will make you a success. I strongly suggest those who are truly interested in brokering notes to attend the NoteWorthy Convention to be held in October. Come leam from the Profressionals.Contact Linda Marchi. Tell her I suggested she send you information on the NoteWorthy Convention and subscribe to the their news letter.

35% Yield With Small Money (The Perpetual Partial)
featuring Nick and Nora Noteholder
written by Tom Henderson

The following is an excerpt from THE NOTE PROFESSOR NOTEBOOK. This is only one of many simple, but powerful and effective techniques, where you can enjoy astronomical yields for small amounts of money.Once you start learning how the variables of time value of money relate to one another, you can tweak deals to make even more astounding yields. Can you think of other ways to apply this technique?

35% Yield With Small Money
(The Perpetual Partial)

This technique has been called the Ten for Twelve Method of purchasing cash flows. I call it the Perpetual Partial. In the lesson "Renters Get 31% and More", you learned how the concepts of Time Value of Money could earn you high yields, while using little cash, and with little discounts. The Ten for Twelve Method or Perpetual Partial uses the same concept.

Often a note holder needs only a small amount of cash, and does not want to sell his note at a large discount. However, he/she will gladly exchange twelve payments for the price of ten payments. The scenario goes like this:

Nick and Nora Noteholder would like to take a long vacation. They estimate it will take around $8,000 to go on this dream trip. They would rather not dip into their savings, nor do they want to borrow the money. They do have a note that has 180 months left, with a $95,000 face value that pays $801.66 monthly @ 6% interest. Here is what their note looks like:

N = 180
I/Yr = 6%
PV = -$95,000
PMT = $801.66
FV = 0

Can you solve their problem of needing $8 grand to go on vacation, and your receiving 35% yield at the same time. After reading this lesson, you can. Simply offer to give them ten payments in advance for the right for you to receive twelve payments. Nick and Nora would receive $8,016.64 immediately. You would receive $801.66 for twelve months. Hence the name Ten for Twelve Method. Let's see how your end of the deal looks.

N = 12
I/Yr = 35.07%
PMT = $801.66
PV = -$8,016.64
FV = 0

That is right sports fans, you get a whopping 35.07% yield. Do you like these type of yields?

Are you noticing that with only a $1603.34 discount, you will enjoy a 35% yield. How can this be? It is the relationship of N to PV to Yield. Because N is such a short period, only 12 months, a small discount will translate into astronomical yields.In this case, we went from 6% to 35%, with only a little over a $1,600 discount.

But Professor, I understand why this technique is called Ten for Twelve Method, but why do you call it the Perpetual Partial? Again, it is simple. At the end of the twelve month period, you simply ask Nick and Nora if they would like to do it again. More often than not, because of the small discount, they will gladly want to repeat the process.

Put yourself in their position. Would you rather have $8,016.64 now, or $801.66 for the next 12 months. Then after another year, you will ask them to do it again. It will be a "perpetual partial".

Combine the Perpetual Partial with the techniques in the lesson "75% Yield", and you can have even higher yields.

Always consult and attorney and CPA before getting involved with any note or real estate deal. There are tax and legal consequences.

Try this technique, and contact The Professor, to tell me how you came out.
I love success stories.

All rights reserved.H&P Capital Investments LLC

Tom Henderson
H&P Capital Investments LLC

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