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Updated almost 10 years ago on . Most recent reply

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Rodney Dixon
  • Tampa, FL
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65
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Most profitable note structure?

Rodney Dixon
  • Tampa, FL
Posted

As I'm considering to structure a note deal on this pre-forclosure lead that just came in, I need some advice on making the best move. When it comes to the best structure that will also be the most profitable(its ability to be sold for top dollar), which of these structures should I execute: land contract, installment contract, AITD or a wrap?

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Dion DePaoli
  • Real Estate Broker
  • Northwest Indiana, IN
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Dion DePaoli
  • Real Estate Broker
  • Northwest Indiana, IN
Replied

Rodney,

I have a feeling you don't get it.  


The options you explored are literately repeats of each other.  A Land Contract or Contract for Deed IS an installment contract.  An AITD (All Inclusive Trust Deed) IS a Wrap (Wrap Around Mortgage).  

The two ideas you mention require the property owner's participation.  Further the manner of your post implies you also need some type of tenant/buyer/borrower that does not appear to be you.  It is not clear if any of those or both of those are actually present.  

In addition, I am guessing you are not as aware of the risks involved with Subject To investing.  Additionally the idea of Due On Sale.  Look up some threads here on the topics.  

The property is about to be foreclosed.  You must have the capital to stop that process first and foremost.  If you do not, you are wasting your time.  Further, be careful putting another party in harms way by trying to sell an interest in a property that an imminent foreclosure.  That is the kind of stuff that gets you hefty fines and stripped jump suits.

  • Dion DePaoli
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