Issue IV - November/December, 2003

How To Structure a Note To Sell at Closing
The Paper

Remember, the three factors that will determine a note's value, or marketability is what we call the Three "Ps"…the PEOPLE, the PROPERTY, and the PAPER.
Last month we covered the PEOPLE. This month we are going to cover the PAPER, or the note itself.

When structuring a real estate note, be sure to make the terms realistic. I have seen notes that were structured in today's market at 15% interest, with a three year balloon. These sellers are flabbergasted when they are told their note is practically unmarketable. More>>

Time Value of Money Can Make You Richer
(Continued Part IV)

Remember, in discussing how to evaluate the time value of money, we are actually evaluating the relationship of five different variables. Change one variable, and it affects another. It is the knowledge and ability to modify one or more variables of a note that give us the power to change a meager 7% note, into a fantastic instrument that will yield over 75%. Let' look at the variables again. You will find these buttons on financial calculators. If you do not have a financial calculator, you need to get one.


Notes make your deals fly...

Definition: Federal National Mortgage Association (FNMA)
     A publicly owned, government sponsored corporation chartered in 1938 to purchase mortgages from lenders and resell them to investors. Often called Fannie Mae. Will mostly package mortgages back by the Federal Housing Authority (FHA), but also sells some non governmental backed mortgages. Shares of FNMA can be purchase on the New York Stock Exchange.

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