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How Real Estate Investors Use Mortgage Note To Purchase Properties
Many of you may not be aware of the various ways notes can be used. The average person's understanding about notes is that people create them because they are desperate to sell a property. Nothing could be further from the truth. Real estate investors are now creating notes to finance properties they wish to buy--then selling the notes in advance--then buying the property with the proceeds--in effect, with little to no money down; of their own. Selling a property by being willing to create a note actually shows savvy on the part of the seller. Even some real estate agents view a seller's willingness to sell by owner financing as a desperate...but the real estate agent who knows better is very hard to find. Most of them are missing not only the boat, but the whole ocean! Not to demean real estate agents, but most of them have a linear kind of thinking about how to sell property and it not only limits their own income, but hinders them from being the best helper they could and ought to be to property sellers. Real estate investors and savvy property sellers bypass working with real estate agents for mainly the above mentioned reasons......not to mention the savings realized by not using real estate agents and having to pay their fee. Okay, so here's a scenario we recently worked on to give you an example: Mr. A wishes to buy Happy Trails Apartment Complex from Mr. B. The Happy Trails Apartment Complex is a 300 unit complex and is desirable when you run the income and expense calculation numbers on it. The price is $25M and the appraised value is around $29M. Mr. A envisions that if he were able to create a note for $29M and sell it to note investors at a discount, he might still be left with enough to make an offer to the seller. Confused? Okay, Mr. A approaches us with a proposed $29M note he wants to create in advance to buy Happy Trails Apartment Complex from Mr. B. We investigate the case and find that the property can service the debt. Mr. A has good enough credit and sufficient equity in other properties to pledge as collateral to satisfy our investors. All that's needed from this point is for Mr. B to accept Mr. A's offer and for the appraisal to come in at $29M or better. Mr. A approaches Mr. B and offers him $25M for his property. Mr. A proposes that he give Mr. B $21M upfront and asks Mr. B to carry back a $4M note. This allows Mr. A to not only give Mr. B $21M but it also allows Mr. A to keep $4M in reserve. Mr. A now has two mortgages. One for $29M and one for $4M. All Mr. A has to figure out now is how best to structure the payment terms on the $4M note. Although Mr. A will pay $31M dollars for the Happy Trails Apartment Complex in the end, how long do you think it will take for the property to be worth another $4M? Not many. And if Mr. A did some small thing like freshly painted all the units and raised the rent by only $5, he would generate an additional $15,000 per month instantly! I could go on but hopefully I have sufficiently explained how real estate investors are creating notes and taking advantage of our Table Funding/Simultaneous Closing Program to achieve their goals. If you would like to know whether Simultaneous Closing could work for you, contact us and let's discuss what your options are. Frederick Webb is a Certified Cash Flow Consultant and is President & Co-Founder of Webb Funding Group, a small debt brokerage agency he runs with his wife, Kashita Webb. Visit their site: http://www.mortgagenotecash.com
MORE RESOURCES: Experts predicted Minnesota real estate agents would quit, 5 INVESTIGATES found a different reality 5 EYEWITNESS NEWS Altadena’s rough real estate market: Slower sales, lower prices, lottery winner plucking up properties Los Angeles Times Real estate magazine reports Les Wexner as Blue Heron buyer The Martha's Vineyard Times Real estate expert warns socialist mayoral candidate could trigger massive NYC exodus - Fox Business Canadian psychologist Jordan Peterson sets up shop in the Valley, records show The Business Journals Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem - Crain's Detroit Business Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem Crain's Detroit Business Office real estate wide open in Denver as vacancy rate hits 36 percent Colorado Public Radio Vail Valley real estate inventory is on the rise VailDaily.com NAR Real Estate Forecast Summit National Association of REALTORS® Real Estate Partners Dollar Tree Let's Talk Business: June residential real estate sales lagging, heritage grants and more Pueblo Chieftain A New Perspective: Here Comes the Groom | Real Estate Insights Piedmont Exedra Boston Real Estate Times Unveils 2025 Excellence Award Winners: Honoring the Visionaries Shaping New England’s Future Boston Real Estate Times Dawson County weekly real estate transactions, July 18 Central Nebraska Today State lawmaker joins Westport commercial real estate brokerage as vice president Hartford Business Journal Bard College hires real estate advisor and broker to sell Simon’s Rock campus - The Berkshire Edge Private Credit Surges in 2025 as Real Estate Developers Bypass Banks The World Property Journal Real estate news: Senior apartments in Tustin sell for $83M; Fullerton Metrocenter snares $118M Orange County Register 5 Essential Tech Tools for Real Estate Agents National Association of REALTORS® New York Housing Market Trends 2025: Is the Tide Turning for Buyers? Norada Real Estate Investments Los Angeles Water & Power commits $100 to real estate debt Pensions & Investments Today’s Mortgage Rates: The States Offering Lowest Rates – July 18, 2025 Norada Real Estate Investments Property management with an owner’s mindset J.P. Morgan Corcoran McEnearney Announces Evan Lacopo to Lead the Number One Real Estate Office in Alexandria, Virginia Alexandria Living Magazine SRS Real Estate Partners Arranges $4.53 Million Ground Lease Sale of Walmart Property in Deltona, FL citybiz Real Estate Market Report (June) highlandscurrent.org Licking County real estate transfers for June 30-July 4 range from $200,000-$14.6 million The Newark Advocate Banner Real Estate Group Breaks Ground on 334-Unit The Faywell Multifamily Development in The Heart MultifamilyBiz Bridgemarq Real Estate Services® Declares Dividend Yahoo Finance Moon Becomes Next Real Estate Frontier, NAR Reports Higher Foreign Investment In US Huntsville Business Journal CBRE Announces Strategic Leadership Appointments Across U.S. & Canada Advisory Business Boston Real Estate Times Gravelle advises on current real estate market in Grant County Columbia Basin Herald Frederick Ford, real estate executive and first Black Union League Club president, dies at 98 Chicago Tribune Mapletree Sells Sun Belt Warehouse Portfolio to EQT Real Estate for $241M Commercial Observer Operation Pawssible: Greenbrier Humane Society gets a boost from local real estate company Mountain Messenger GenesisM Breaks Ground on 154,000-Square-Foot Biomanufacturing Facility in Bedford, MA Boston Real Estate Times AGC MA Announces 5th Annual Building Advancement Externship to Bridge Educators with STEM Construction Careers Boston Real Estate Times What's the most expensive property sold in Rhode Island? July 18 real estate transactions The Providence Journal The Pipeline: Commercial real estate roundup for 7.18.25 Richmond BizSense LOCAL REAL ESTATE TODAY 7.18.25 KQEN News Radio Home Buyers: Stop Freaking Out After the Home Inspection National Association of REALTORS® Home Buyers May Have Accepted a New Norm on Rates National Association of REALTORS® Tips on spotting real estate investment opportunities and avoiding risks, from experts at GR Property Group Community Impact SRS Real Estate Negotiates $4.5 Million Sale of Walmart-Anchored Property in Metro Orlando Shopping Center Business Miami-Dade’s self-storage surge a boom for real estate IslanderNews.com Stage Point Europe Launches Its RWA Token $SPET, Setting it up as a Bridge Between Crypto and Real Estate Morningstar Hunt Companies Acquires Controlling Interest in Carter, Strengthening Real Estate Development Platform Business Wire Top Stocks for Real Estate Investment Elite AI Stock Forecasts - Massive wealth growth Jammu Links News New plans unveiled for Water Street’s second phase Tampa Bay Times July Economist Snapshot: What Will the Big Beautiful Bill Mean for Commercial Real Estate and Housing? Urban Land Magazine Vend Leans Into Verticalisation As Real Estate Revenue Grows 11% In Q2 onlinemarketplaces.com Is Apollo Commercial Real Estate Finance Inc. a good long term investment - Explosive market performance Jammu Links News Wood County Recorder reports on second quarter real estate activity BG Independent News Vendor & Real Estate Partners Dollar Tree Development Services Offers Online Early Assistance for Commercial Real Estate Projects Prince William County Government (.gov) Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 - The Courier-Journal Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 The Courier-Journal Drake Real Estate Partners closes largest fund yet after pivoting to institutions Private Equity Real Estate | PERE Real Estate Transfers ~ June 25, 2025 The Bedford Citizen Choice Properties Real Estate Investment Trust 2025 Q2 - Results - Earnings Call Presentation (OTCMKTS:PPRQF) Seeking Alpha Real estate transfers: Lake Township condominium complex sells for $5.61 million - Canton Repository Manitowoc's real estate transfers include a sale of nearly $1 million to Riverside Dairy Herald Times Reporter Real estate office transforms into collection center for donations being transported to Kerr County kens5.com Stonelake Capital sells dozens of industrial buildings across US for $920 million The Business Journals |
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