I just heard of a tip in buying notes. (Now this may be old
news but I’m sure many haven’t heard of it.) One source
recommended to look for notes and/or deeds where
Bail-Bonds are offered.
Anyone have any experience with this?
David G.
David,
I heard this technique a good while back and immediately began calling folks out of the phone book. I may be off, but my recollection is that this wasn’t a viable technique in our state due to homestead laws. After about five calls to bail bonds shops and hearing the same response, I shelved it.
Perhaps since I can’t remember the reason, I should give it a go again. If you test it, please post your results. :lol
Sounds like a long-shot approach.
I’ve done well with the good old fashioned method of researching first and second mortgages held by private individuals and contacting them. I especially like low leverage notes, like the one I just picked up for $50k on a 65% LTV deal.
Jeremy,
You know the last post in this thread is almost 10 years old, right?
Keith
When I started in this crazy business back in 1991, I thought I would be buying and selling notes and mortgages. I quickly realized that everyone and their sister was a part time note broker. This drove the pricing up as too many were competing for the available notes.
This brought me to go in the direction of ‘creating notes and selling them.’ I would buy a cheap mobile home, resell with owner financing, use the title as security for the note, then sell the note to those who own IRA’s and Pensions; after all there are some 7 trillion dollars in qualified plans at this moment.
I would just say in a normal conversation, how much of your pension / ira is earning under 18%. Everyone would answer, “All of it!!” That put me in the middle of a presentation to sell my notes.
If you think 18% is too much, think again. I have purchased hundreds of mobile homes for under $4k per home. If you find one at $4k, resell with owner financing for 750 down and $200/month, this is what it looks like:
50 months 12% $200.00/month payments $7840 PV financed $ plus $750 down.
This is what I yield in the deal:
50 months 69.41% yield $200/month $3,250 left in deal ($4k buy minus $750 down)
If I sell at an 18% yield, the investor pays $6999.94 and gets back 50 payments of $200 or $10k.
$6999 minus $4000 cost plus $750 down = $3,749 profit to buy groceries!
It is 22 years later and this is still a viable deal that anyone can do and exchange their time for big profits.
Hope this helps.
RC