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How to Use Notes to Get Better Real Estate Deals

Over the years, on my path toward the institutional note business where I work today, I saw many savvy investors using notes to get better real estate deals. Next, I noticed those who were buying REO (real estate owned) properties. Banks tend to like selling REO’s in this fashion, because they can often make more money selling to buyers who want their local areas. And that’s exactly what I did with notes and creative financing ideas by making multiple offers, some of which involved notes. But here’s what else we could do.” My second offer might be $90,000 with a $25,000 seller second mortgage carried over five years that’s interest only. Seller Seconds If you noticed above, my first two options involved owner financing through what is known as a seller carry note or seller second mortgage. This is one of my favorite owner financing strategies when going to sell my rental properties, because to put it simply, I can still cash flow off of a property AFTER I sell it and WITHOUT owning it. They’ll cash flow nicely with low out-of-pocket capital invested, and then I’ll place those notes with a loan servicer. So to sum up, for the seller like me offering secondary financing, there can be quite a few advantages: By offering terms to buyers, you can sell the rental property easier, especially to another investor — like we did in the first example. Plus, the seller can offer a seller assist to a buyer with the money she saves in these fees, making the sale more appealing.