I invested in my FIRST note!
Investment Info:
Single-family residence note investment investment in Gilroy.
Purchase price: $60,000
Cash invested: $60,000
2nd mortgage note is what I own. 1st mortgage is $65,000 and property is valued at $1.1M
What made you interested in investing in this type of deal?
I have owned multiple sfr rentals and enjoyed them. At my age (57) and my goals, I decided to pivot and go with note investing rather than rentals.
How did you find this deal and how did you negotiate it?
I LOVE the negotiation process for notes! A RE Broker brought me the deal. Her client had a property he wanted to leverage, but the property is 25 acres with a sfr on it and no HELOC's are available--only commercial loans. I asked for 9% (knowing commercial was 10-12%) and got it done!
How did you finance this deal?
My own cash. The deal was for 1 year (but has been extended for 1 more year). I'll have another year of interest and then get my cash back to send out again.
How did you add value to the deal?
Borrower couldn't get a HELOC in the traditional way. I offered a win/win loan and we're all happy.
What was the outcome?
Still cash flowing.
Lessons learned? Challenges?
GREAT first experience. I now have 3 notes and looking for more.