Buy notes (loans secured by Real Estate at discount price)

Example: house value $100,000.

First Trust Deed (note): $60,000 interest rate 8% due in 5 years

Assuming: We buy the note for $50,000.

We continue getting monthly 8% ($400 interest payment) on $60,000 even though we only invested $50,000 and at the end of the period (loan due date) we receive back $60,000.

Assuming that 24 months left on the loan: 24X400 = $9600 + $10,000 = $19,600 profit for $50,000 investment = close to 40% profit in 24 months.

Why will people/institutions sell us their Private Mortgage Note?

• An immediate need for lump sum of money
• Wanting to diversify assets
• Needing to pay off other high interest debt
• Preventing foreclosure or bankruptcy
• Business owners needing cash that is tied up in real estate loans