1. They make sure that the insurance policy on the property is
issued for an amount that represents at least the full value of
the note still owed to them.
2. They also make sure that the note is recorded and they are
listed as mortgagee, trustee, or the first contract holder on
the policy. This guarantees that they will be entitled to any
proceeds from any claim ahead of the borrower. 3. They make sure
that they get a notice of cancellation if the borrower fails to
keep a current policy on the property.
4. They make sure that real estate taxes are paid on time by the
borrower, and if necessary the note holder will pay the taxes
themselves.
5. They make it a habit to drive by the property on a regular
basis or have someone drive by to make sure that their
investment is still intact.
6. They keep all pertinent information on the buyer in a safe
place in case of fire, flood, earthquake, hurricane, tornado or
any other type of catastrophe.
7. They make sure that they have received an amortization
schedule from their attorney or title company so that they can
keep up with all payments that are made to them.
8. They notify the borrower well in advance (at least 3-6
months) before a balloon payment is due. This gives the borrower
more than enough time to find favorable financing; this reduces
the threat of default.
9. They don't allow the borrower to get comfortable making late
payments. They install a late payment clause in the contract and
enforce it.
10. They are serious about their money and initiate foreclosure
proceedings at the first sign of trouble. They are not childish
in this area. They obtain the services of an experienced
foreclosure attorney to handle the problem instead of trying to
save a few bucks and "do it yourself".
11. They realize that a note is a depreciating asset. They
understand that each month and each year the value of their note
becomes less and less due to inflation.
12. They understand the time value of money and are able to
answer these questions:
. How much is my note really worth in today's market? . If I
decide to sell today for all cash, how much would I get? . Can
I sell a partial of my note? . How fast can I get the money? .
Who will buy it? . What is my risk factor in the long run? .
What if things don't work out as planned? . What is my exit
strategy? . Should I continue to receive monthly payments for
the duration of my note?
These are considered some of the best reasons why some people
are successful note holders and some are not. There are more,
but these will make the greatest impact on you if you can
emulate them. If circumstances in your life indicate that now is
the time to convert your note into cash, please give us a call
and let us help you.
Also, if you need to only raise a specific amount of capital, we
can structure a partial so that you receive exactly the amount
you need without having to cash out your entire note.
About the author:
Richard Wills is an expert in private Real Estate Financing and
cash flow settlements. He is a former Licensed Real Estate
Professional and Bail Agent for the state of California, as well
as a noted author, professional coach and consultant. He has
helped 100s of real estate professionals, attorneys, financial
planners, business owners, accountants and others, in converting
paper assets into cash. To learn more visit
http://www.a-znotebuyer.com
