Cash for Keys...Buying and Selling Real Estate Notes
The information that I am sharing with you will be a valuable lesson, pay close attention.
Assuming there are no Junior Lien Holders...
In CA, I could find buyers willing to pay 75% of market value for an REO.
Non-Performing notes aka Real Estate Notes are even more discounted and can be bought at 50% of market value.
So the act of taking a property to sale, and eliminating primarily the BK risk, is worth a full 25% of the homes value.
Remember this when you are buying and selling real estate notes!
Buying and Selling Real Estate Notes - A Cash for Keys Example
Let's look at the numbers:
$100,000 market value of home
$150,000 Mortgage-1st Lien
$50,000 for purchase
What should I offer the Homeowner in Cash for Keys?
Well, lets say we offered $15,000. What would the yield be on that investment, assuming the homeowner accepted, and we took 4 months from purchase of note to sale of REO?
It would be 45%
You paid $50,000 to buy your real estate note, and another $15,000 to the borrowers for the deed. The house sold for $75,000 in a 1/3 or a year. Take the yield and times it by 3, this is your annualized return.
Cash for Keys, Save Valuable Time
Paying up to 15% of the home's value in order to get the Deed is justifiable. The amount of time you save is high as well as the impact on yield.
Before you think "no way Mr. Borrower, you don't deserve a dime!", think about the impact of having the Deed and the costs you can save. Don't be stingy on your cash for keys offer.
Make your own success - Take Action!
The information that I am sharing with you will be a valuable lesson, pay close attention.
Assuming there are no Junior Lien Holders...
In CA, I could find buyers willing to pay 75% of market value for an REO.
Non-Performing notes aka Real Estate Notes are even more discounted and can be bought at 50% of market value.
So the act of taking a property to sale, and eliminating primarily the BK risk, is worth a full 25% of the homes value.
Remember this when you are buying and selling real estate notes!
Buying and Selling Real Estate Notes - A Cash for Keys Example
Let's look at the numbers:
$100,000 market value of home
$150,000 Mortgage-1st Lien
$50,000 for purchase
What should I offer the Homeowner in Cash for Keys?
Well, lets say we offered $15,000. What would the yield be on that investment, assuming the homeowner accepted, and we took 4 months from purchase of note to sale of REO?
It would be 45%
You paid $50,000 to buy your real estate note, and another $15,000 to the borrowers for the deed. The house sold for $75,000 in a 1/3 or a year. Take the yield and times it by 3, this is your annualized return.
Cash for Keys, Save Valuable Time
Paying up to 15% of the home's value in order to get the Deed is justifiable. The amount of time you save is high as well as the impact on yield.
Before you think "no way Mr. Borrower, you don't deserve a dime!", think about the impact of having the Deed and the costs you can save. Don't be stingy on your cash for keys offer.
Make your own success - Take Action!
About the Author:
Interested in learning more about the Note Buying Business? Watch Hours of FREE Training Videos here: How to Buy and Sell Notes Real-life, Up-to-Date Information for You. Visit NoteBuyingProfits.com or Call 718-783-7605 Or Click Here: How to Buy and Sell Discounted Notes From Dean Engle & NoteBuyingProfits.com - This time on How to Buy and Sell Real Estate Notes
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