I wanted to take time out and wish you and yours (All the Father’s Out there) A Happy Father’s Day! One of my favorite things to do is welcome a new father to the Dad’s Club. The most rewarding club I know of, and Father’s Day is one of the reasons.
If you are not a father, I wish you a great weekend as well.
The Texas Note Company Founding Director Robert E Young, The Texas Note Guy, will Again be on 98.9 FM in Austin, Texas Saturday June 19 at 2pm CST. Robert will be on live with Jim Warr of Warr Investment Group. Tune In to learn about Finance and How to Sell Your Note.
Click to listen live Saturday June 19, 2pm CST.
Please Vote for Little Helping Hands in the Chase Community Campaign. This is a GREAT Charitable organization that teach Young Children how to give back to the community. With your vote they will receive part of $500K. Both of my girls have participated with Little Helping Hands over the past year. At ages 4 and 8 years of age, they have wrapped presents for children in foster care for the holidays, they’ve prepared many meals for the Ronald McDonald House, made paper tissue flowers for moms with children at the hospital over Mother’s Day, planted flowers at the Children’s Shelter, and more.
The Texas Note Company is a Big Supporter of Little Helping Hands!
PLEASE FOLLOW THE LINK BELOW AND VOTE!
http://apps.facebook.com/chasecommunitygiving/charities/270452295-little-helping-hands
Thanks for your help with this! And pls. continue to spread the word and remind folks to vote
Thanks,
Often is the case that a customer or potential customer will come to The Texas Note Company and ask “I want to sell my note. How long will it take to close?” It is almost a trick question, what is boils down to is how well the note holder has kept the records that pertain to the note and the accounting practice that is in place to keep track of the payments. It really is as simple as that as to how fast a note sale can close.
The one thing to keep in mind though is if one of the note elements is off then that will have an impact as well. For instance if the payor’s credit is sub-par, then the discount on the offer will be steeper because of risk to future payments. That may cause the note holder to contemplate on whether or not they accept the offer which can add to the time to closing.
The one item that I have experienced that can take some time that the broker or the note holder really have no control over is the time it take for the title to be cleared, either through a title abstract or a policy issues. I have been involved in note sales where it can take as little as two days and other where it take two weeks, because the title company was backed up. [Read more...]
6. Term of the Note
Setting a term of 10 to 20 years is usually best when you think about how long to carry the note. This is where you can be sensitive to the buyer and what he can afford each month. Just don’t create a note with a low interest rate amortized for 30 years. You want top establish a term where it is attractive to an investor and offers incentive for the buyer to refinance using traditional methods. Investor usually like shorter term notes so they don’t have extend their money for 30 years. A term between 10 an 20 years is usually right in line with what an investor will buy your note and pay top dollar for. There is nothing wrong with creating a note that is for 12, 13, or 16 years in term. If you can create a 10 year note with straight amortization then that would be what I would recommend. You need to make sure that it is affordable to the payor.
7. Balloon Notes
Balloons is a good option but you need to be careful how you use it. Don’t create a note amortized over 30 years with a three year balloon just because it sounds good and think you will get all your money in three years. When using a balloon like that you need to make sure you have a clear exit strategy for that to work. Some sort of event should occur in three years for that to work. Besides a 5% interest rate like I said before is not attractive over thirty years even with a balloon.
There are some investors that like balloons and some not so much. I have two thoughts, first for those investors that like balloons. Amortize the note over 30 years with an interest rate of 10% and the balloon due in 7 years. That will still provide opportunity for an exit strategy for the payor to refinance if the payor is able to qualify using traditional methods. Should you need to cash out of that position before then there are investors that will purchase that paper. [Read more...]
3. Documentation Practices
This is where I see a lot of frustration and note sales take a turn for the worse. The ORIGINAL promissory note is the GOLD in the transaction, The Texas T. Losing that document can be a very costly mistake and akin to burning cash money. I have been to a few closings where the note seller does not have the ORIGINAL promissory note and kills the deal altogether. The signatures should be in blue, but if they are in black you can wet your finger and then rub on the signatures. If they smear you have the original document, if they don’t then you have a copy.
Now aside from losing the promissory note you can save yourself a lot of pain and anguish if you practice sound record keeping practices. Keep the original promissory note and all the documents from closing in a safe findable place. Don’t just shove them in a drawer and forget about them. These are the documents that will be needed to sell your note
If you have all these documents at hand this will expedite your transaction significantly, if not then it can drag on for several weeks. [Read more...]
The Texas Note Company Founding Director, Robert E Young will be on 98.9 FM in Austin, Texas Saturday June 12 at 2pm CST. Robert will be on live with Jim Warr from Warr Investment Group.
1. Down Payment
When you sell property using owner financing the down payment sets the tone for the whole transaction and the value of your note. A common mistake among sellers is to accept a small down payment. It is amazing the price you can get for your property with little or no down payment. Just don’t be amazed when you sell your note the deep discounted offer you will receive.
Here is why it is important. For starters when you sell your property you want to get something out of it right away, like a good down payment so you can go onto you next project. Secondly, and more importantly, you want a 15% – 20% down payment because it puts skin in the game for the buyer. Meaning if times get rough for the buyer he is less likely to walk away with a larger down payment. Statistics prove that the larger the down payment the less likely of default. [Read more...]
