Posted by David Butler on May 15, 2004 at 11:45:43:
In Reply to: Re: Creating a 2nd Mortage/Note??? posted by Tim on May 15, 2004 at 10:15:13:
Hello Tim,
There may or may not be several different ways to go here. Their are a number of ways to achieve creative real estate investing, and a lot of broad ground to be covered when starting from scratch.
Getting the EXACT "dealmaking" answer you seek in this type of Forum Defining is a very difficult undertaking for both sides of the equation. Generally, the person on your side of the fence has to bring something more to the table to in order to allow respondents enough to work with in offering possible solutions.
A starting point here would be to try and state your objectives more clearly is a starting point for which options are most suitable and viable for you, is the place to start. Then start looking through this web site to FREELY explore the hundred plus ways you can match up to your objectives.
Here's a good place to get started from, in gaining both the advantages/disadvantages of the issues that you touch upon here...
"Second-Fiddle!"
http://www.creonline.com/cashflow/wwwboard3/messages/13073.html"Note Investing?"
http://www.creonline.com/cashflow/wwwboard3/messages/16439.html"Poor Boy Sandwich"
http://www.creonline.com/cashflow/wwwboard3/messages/17109.html"Case Study"
http://www.creonline.com/cashflow/wwwboard3/messages/14547.htmlWant to mention too that though I am aware of some investors who will count prepayments in some way, to offset seasoning. In my view, and most the investors I've come across however - it has absolutely no bearing on the "seasoning" issue. Seasoning is simply one of those kinds of things that money can not buy. Only time and good payment history can do that.
Instead, I factor in such an event in looking at Payor's equity going into the deal. In that respect, the extra payments up front do enhance Payor's hard cash in the deal up front. At the same time however, they work against the intitial cash flow value of the note - inasmuch as the note buyer would then have to wait six months for first cash flow.
Food for thought, but hope the combination above helps you in getting a deal structure that will meet the objectives of both parties here.
Also worth considering... if you don't have time to do what you need to do to do a deal right - you don't have time to do the deal! Best wishes for your success in finding the time you need to make this one happen!
David P. Butler
- Re: Creating a 2nd Mortage/Note??? Frederick Roten 20:53:02 11/15/04 (0)