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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.
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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.
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