7 Deadly and Common
Mistakes to Avoid
When You Carry Paper
O
wner financing is quickly gaining
popularity as a way for sellers to
sell property for top dollar without
relying on the bank financing that is avail-
able (or not) to prospective buyers.
Unfortunately, most sellers (and the pro-
fessionals who serve them) don’t seem to
have a basic understanding of the second-
ary note market, which profoundly affects
the paper asset (the note) they are left hold-
ing.
Sadly, this often equates into unneces-
sary financial losses when the seller/note
holder goes to sell all or part of their note
to raise cash.
Seller financing helps sellers get top dol-
lar for their property, Dawn makes sure
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they get top dollar for their paper, by using
her expertise to:
•engineer the transaction intelligently
•make sure the note documents are ac-
curate and complete
•fully underwrite the buyer
The following is an excerpt from her
book, “Seller Financing on Steroids”.
When sellers are going to become the bank
on their own property, they need to learn to
think like a bank, or hire their own personal
underwriter.
Deadly Mistake #1: Take a small down
payment, or none at all
Isn’t it amazing the price you can get for
PAGE 50 • 2011
your property if you don’t ask for a down
payment? You can make owning a home
cheaper than renting if you want to!
It’s OK with me if you take a small
down payment to sell quickly for the price
you want . . . just don’t be offended when
I offer you a small price for your note, or
I tell you I can only buy a partial, or that I
can’t buy it at all.
Why? Because the risk of default is so
high. If things got tough, it would be too
easy for the buyer to just walk away, be-
cause they don’t have enough ‘skin in the
game’.
And actually, if they can no longer af-
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