I some very basic questions…I owner finance a 65K house and the note is then worth like what 150-180K over 30 years…
so I then have 150k in assests with the note.
I then use that note as collateral to purchase another house?
Let’s say the new house is 108K…
So I have 42K left on the original note…to use potetially as collateral for another transaction…?
Also, If I owe 25K on a rental House that is consistently leased and I want to buy another house…Can I get the 25K from the other note wrapped into a new mortgage. Would it help if it was through the same mortgage company?
I have successfully applied some simple concepts in the past to get no money down cash back deals…and I am trying to build on my past successes…
I love the idea that a 60K house becomes a 150K plus note.
I have some other detailed questions about the benefits of setting up a real eststa holding company, but I’ll wait to post those questions…
:cool HEY MATT i broker notes and who do you get to pay you funds on the note value some where in the yet to be
MOST notes our bought and sold on there face value AS your buyer can screw off the payments at any time // and there is nothing saying he can not things change
SO your note is not worth any more then its face value at the time of sale BUT yes you can sell off payments yet to be made is this what you are talking about ??
Where are you reading that a $60k house can become a $150k note? The note is valued at it’s present value, not the sum of all the payments to be made over the course of 30years. That is simply naive finance theory.
In reality if you sell a house with owner finance say for $60k and carry a 100% ltv note then you traded a $60k asset for another $60k asset. You can then sell the note in the open market for its fair market value which may or may not be $60k depending upon the rate of return required by the purchaser. The proceeds from the note sale can then be used to acquire new investments but I’m sorry to say no one is going to pay you $150k for a $60k note. Read up on basic finance and the concept of fixed income instruments ie. notes and bonds. It will be very useful in your investing future.
:cool HEY do not beat yourself up you did not know and this is the place to find out !!! :biggrin AS we here have some of the best at what we do here to help you and others like you /// this sites has the best you can get with out spending alot of money for mostly fluff!!!
JUST look at us here as once where you are and now we as a group are the multi-million -dollar free information center HERE TO HELP :bobble
Don’t take anything personally here. This is a good site for asking questions and getting answers. If you learn something from any question asked then it was a good question no matter what others might say (even me). Good luck.
Thanks guys,
I certainly have lost my fear of what I don’t know…I do not take anything personally…I just want to learn…I am primarily interested in learning, not worrying. While I am obviously new…I am always facinated with how many options there are as far as transactional scenarios. Once I got the hang of of THINKING differently I essentially gave myself liberty to create my own situations. Now, some of my ideas turn out to be “bass ackwards”, but the process of going through the thoughts has always benefitted me…
On that note…correct me if I am off on these fundamentals…
The “LLC”, or whetever corporate entity, buys the house. It then sells the house and owns the note. The payments from the house note don’t cover the operational expenses of running the company…so all the money is spent pre-tax on operating the Corp…and I dont give away the personal taxes I would have incured having done the same transaction as an individual. Am I am the right track? I understand this is simplistic, but I am just wondering if these are some accurate basic principles…
Regardless of ownership (llc, c-corp, s-corp, individual) if there is a gain on the sale of the property there will be taxes due. Having said that, the llc or corp entities will afford your personal assets protection from creditors and open up opportunities fow writing-off additional expenses. The cpa’s on the site can offer further details.