HAPPY ENDINGS: THE UNADVERTISED BONUS OF INVESTING IN DISCOUNTED NOTES DAWN RICKABAUGH
Becoming
the
Bank.
Instead of selling your real
estate holdings for cash, or to
the lucky guy who can get a
loan, become the bank on
your own property by offering
owner
financing/seller
financing/terms to the buyer.
If you have equity, or attractive
underlying financing, or any
combination of the two, you
can usually do this by using
one
of
several
strategies
available.
If you own a property free and
Many people who have built up small portfolios of rental properties over a
clear, (statistically speaking,
lifetime of managing tenants eventually get a bit weary of the job and end
one-third of all properties in
up converting their real estate assets into paper assets secured by those
the
very same properties.
U.S. do not
have
a
mortgage on them), then the
best way to sell quickly for the
Advantages:
highest possible price is to
terms
to
prospective
buyers.
Besides, if you get cashed
•
Sell real estate quickly for the highest possible price
•
No tenants, toilets or taxes – just deposit your check
•
offer
Defer capital gains – (IRC 453 installment sales)
•
Make better returns/yields than traditional investments, secured by
properties you already know intimately
out, what are you going to do
with the money you have left
•
Retain liquidity – if you (or your heirs) ever need to sell all or part of
after capital gains? Put it in a
the note for cash, it’s possible, as long as you put your deal together
CD at the bank and make your
with a basic understanding of what note buyers are looking for.
whopping 1%? Wouldn’t it
make more sense to carry at
even 5% for the buyer if that’s
the best you can do with your
money?
If you’ve ever owned chickens, you intimately
understand why you don’t want all of your eggs
in one basket