All Forum Posts by: Richard Warren

There is another side to this as well. The IRS sets an Imputed (or assumed) rate of interest. If you set a very low rate of interest they will use their assumed rate for tax purposes. I have sold properties offering seller financing. If I am going to hold a note I expect to get a higher purchase price AND an above market rate of interest.

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Franklin D. Roosevelt had this to say about making a speech:

"Be sincere; be brief; be seated."

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City Center is open. The grand opening was in mid-December.

The opening had been tallked about for the last couple of years. It was going to be the property that saved Vegas with all of the added jobs. Funny thing happened though - it actually cost jobs.

New City Center employees = 12,000

However, 4,000 people came from other properties and haven't been replaced.

Job gain = 8,000

Construction jobs lost when the project was completed = 9,000.

So it was a net loss of 1,000 jobs.

So it's not a total loss - the administration in Washington figures it this way:

New jobs 12,000
Saved jobs = 4,000 (those from other properties)

So the net loss of 1,000 jobs means that 16,000 jobs were "created or saved" - the recovery is close at hand!

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First off - you can't "loose" anything. The word is lose. OK, the grammar lesson is over for today.

What you can potentiallly lose is any earnest money (deposit) you put up. If the contract is well written you shouldn't even lose that. If the contract is poorly written there is apotential for you to suffer a much greater loss for failure to perform.

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Just need to point out one thing here. It was NOT Ted Kennedy's seat. It was, and is, the people's seat. Ted Kennedy merely occupied it for the last 46 years.

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The main benefit is fewer headaches. I own rental properties and hold notes on properties I’ve sold in the past. I’ve never received a call because the toilet was backed up on a note. I’ve never had a tenant move out of a note. I’ve never been on vacation and had to worry that something might happen requiring an emergency repair of a note.

Notes are sometimes paid late but I’ve never come close to having to foreclose. If I did there is more than enough equity in the properties to recover my investment.

Holding rental property has its benefits as well. Long-term appreciation being a big one. You don’t get that with a note.

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Typical of real estate “reality†shows, this one ignores expenses. It will show a house being renovated to add an apartment. If the homeowner has a mortgage payment of $2,000 and the apartment will rent for $1,000, they proclaim that the mortgage payment has been cut in half. It totally ignores expenses. They don’t factor the renovation cost in correctly either. Typical reality show BS. I watched a couple of episodes but I can’t stomach it any more.

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My pet peeve is when people mix up loose and lose. How many times do you see someone say they are loosing money. Do they mean it's not tight any more?

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If you are looking to flip, the note isn’t so crucial.

I wouldn’t call this a slam-dunk deal. If you apply a standard rehab formula to this deal it looks like this:

(ARV * 70%) â€" repairs = Maximum Purchase Price

($110,000 x 70%) - $10,000 = MPP

$77,000 - $10,000 = $67,000

The fact that you collect commissions makes it an OK deal as long as nothing goes wrong. If repairs are higher than your estimate it may not be so great. Many rehabbers today look for a deal at 60-65% of ARV less repairs.

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The site EPA states what contractors MUST do but also states what property owners SHOULD do.

As usual, a government agency isn't very clear.

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