Another Money Making Partial Technique
Let's
review what a we mean when we say "a partial".
A partial is where instead of selling or buying
the entire note, a portion of the note is sold
or bought. This can be in the form of buying
a portion of the remaining payments, such as buying
10 years worth of payments of a 30 year note.
Or perhaps buying a partial part of the payments.
For example, you are receiving $200 a month for
120 months, and I purchase $100 a month of the
$200 monthly. You receive $100 and I receive $100.
All you need to remember is that when we speak
of "partials", we are referring to buying
only a portion of the note. If you know the
concepts and techniques, this can be lucrative,
no matter if you are buying or selling notes.
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Equity vs "Market Value"
We
have heard the term "equity" but many do not
understand what equity really is, and as a
result, you can make big mistakes when
purchasing or selling their property. Equity is
something we can show to our neighbors, brag about,
and even borrow against, you can put it on your
balance sheet, but it is a mythical figure,
until cash is pull out of it. Equity can be destroyed
or created virtually overnight by forces outside
your control. I have seen "equity" go from $70,000
to a negative figure in a period of 6 months,
vice versa.
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Definition:
Encumbrance
Any right to or interest in property that will affect its value. Includes mortgages, judgments, other liens, unpaid taxes, easements, and deed restrictions. Certain leases can also be considered an encumbrance. |
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