All Forum Posts by: Alfred Bell

I've been to MB a few times (mother used to live there until she became ill and I moved her back here to CA). The opportunities in MB are not as good as they were a few years back, yet, a savvy wholesaler/rehabber can find deals that will yield decent profits. 

We have a Down Payment Program for proven, experienced, rehabbers and wholesalers. If you are in need of DPs in order to capture-and not lose-those hot deals, or scale up your business, contact me and I'll send you the info on how our DP program works.

My partner and I are investors. We're setting up Down Payment Program for Rehabbers (Fix & Flippers). We're located in CA, yet, plan to be offering DPs nationwide (DOT/non-judicial states for starters). We'd be coming in with the DP money as a 2nd lien loan.

We’re looking for a "Broker of Record" to be on our team and originate the promissory notes for us (for a flat fee, points, or whatever would be workable). Could be a RE Broker or Loan/Mortgage Broker as both are licensed and able to create Promissory Notes. Anyone interested in playing this role? Or, able to refer us to someone who would?

Leverage all investment properties. Own your residence. = Maximum rental income and peace of mind and stability owning your own home. Use an effective strategy and your rental income to pay down your home mortgage to zero as quickly as possible. But have a 40 year fixed on your home mortgage so you have low payments just in case you go through some tough times you will never have to default.

Since you were involved in my condo project you deserve to have closures. This is what occurred...

After all that research work spent on owner financing and structuring the perfect note, a buyer came along with their own financing and I could only manage to get them up to 263k purchase price. I decided to take it as the market is tough in Palm Desert and this might've been the best or only offer. We went into escrow a month ago. Everything was going perfectly and then the agent notified me that the buyer was cancelling escrow (within his 17 day period, so I couldn't keep his earnest money deposit). Cancellation was due to fact that their plan was to rent the condo for 5 years, then sell their house, and then move into the condo as their retirement home... at the last moment the wife decided she wouldn't be happy with the condo as her retirement home (too small, etc.).

Luckily, I had 3 other potential buyers call when I was in escrow and I kept their contact info in case I needed backup. I immediately notified the other 3 and one of them came back to me immediately and offered all cash, no agent representation, and I was able to negotiate her up to 267K purchase price. The buyer loves the unit and is very appreciative of the remodel that I did on it. She considers it perfect for her needs.

Escrow closed today. We made 12k more on the sale than if the earlier sale had went through. Our loss was minimal and will be recouped in a matter of months by putting the capital into some first trust deeds.

A happy ending, eh?

Thanks for your help guys.

Best,
Alfred

Believe it or not, there is still more to this saga. The buyer cancelled escrow!

Yet, this saga will be resolved in a few more days.

Stay tuned for the details.

Update: I finished negotiations yesterday and am opening escrow tomorrow. All that work on setting up for owner financing and I've wound up with a buyer with his own financing. Oh well. He's a good solid buyer and I can't pass this up. It's more important that I just sell and get this project behind me than anything else. Not a problem as I can put my money partner into 1st TDs so that he can recoup the money lost on this project. He is fine with that. Thanks all for your help. I learned a lot. Alfred

Ah ha. Thanks Bill. Now I finally understand the reason why I/O is not good for a note that you would want to sell at a later date. That was the insight that I was looking for.

Oh ok. You threw me off with the error. BTW I can't just accept advice: I have to understand the theory behind the advice and have to agree or I can't move forward. Only can act with understanding.

Yes, would rather collect bigger payments. And yes would like a larger DP. When they asked for my terms I told them 30% DP, $1500-1600 monthly payment, 8 years amortized at 30 years, etc. etc. (as I laid out earlier in this thread).

Not many would be interested in purchasing a 6% note.

It will be interesting to see how far I can get them to come up on the DP and monthly payment. Probably won't reach a mutual understanding with them since they want this as an investment property and have their parameters. But at least offers are starting to come in.

I'll keep you posted on any interesting developments and the outcome on this condo.

Damn. Hate to be thick about this Marc, but I still don't get it. Something I'm missing here.

"The payments will simply be a lower amount for an I/Only note than they will be for a P&I payment. Since there is no interest built into the payment - the payments have to be discounted more in order to suck out any juice!"

The first sentence I understand. The second sentence...

1) no interest built into the payment? But the payment is pure interest. Please explain more fully.
2) If it is 6% I/O and the note is sold at let's say a 10% discount, doesn't that effectively raise the interest? Isn't that juice?
3) Personally I would think I/O would be the best. You get all this interest and your original loan amount never decreases... you get all of your principal back. What am I missing?
4) I still seem to be missing the point on how I/O lessens the strength or value of a note that you want to sell at a later date. Could you somehow set me straight on this point?

Thanks.

Marc:
You responded with... "Interest only is bad because it takes more of a discount for an investor to make any real yield and, it does not build any more equity for the borrower."

I understand the fact that I/O doesn't build any equity for the borrower and that it would strengthen the note if the borrower was building equity and happy with the terms. BUT, so that I may wrap my wits around this, could you further explain or give an example regarding your statement... "Interest only is bad because it takes more of a discount for an investor to make any real yield" ?

Thanks for the speedy response.