Promissory Note?
Hello everyone!
Quick question on promissory note to private money lender. Would I not only provide him with a promissory note to define terms of agreement but, also have him as a lien holder on mtg?
Thanks in advace
God bless!
The promissory note evidences the debt and a mortgage is the security instrument that secures the debt or that the debt is tied to..
When we use private funds the promissory note has the interest rate th at we are paying specified (10-12%) how it will be repaid (monthly or quarterly simple interest payments) the duration of loan (180-365 days) and any points etc. that accrue to thte lender should we only use the money for say 30 days (we then pay points) This is all specified in the note in great detail and then there is a mortgage recorded additionally. The title company generally draws up the note and mortgage with all our specifics on it.
Hope this helps answer your question.\
Randall
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1. Is there any success in trying to wholesale bank REO's . I have easy access to tons of these houses, but my partners only want to stay in certain areas with certain criteria on these houses.
All property can be wholesaled if purchased at a good percentage of market value - when wholesaling it is best to have several investors lined up for an easy flip.
2. The previous houses we have rehabbed, I used my partners bank statements for verification of funds when submitting my offer. If I want to wholesale a house without my partners, how can I provide a verification of funds for an offer. Would a pre-qual letter from a mortgage co suffice? Any other ideas??
Normally a verification of funds letter comes from your banker or mortgage company. Some accept a pre qualification letter and some do not. I rarely have to provide any of this information short of making offers on government owned properties.
3. Is there any type of clause I could put into a contract, so if I cannot find an investor to assign my deal to within the specified time frame, I won't lose out on my earnest money. ( I'm sure this is a weasel clause that most seller's don't like, but I was just curious)
This is subjective based upon the lender and or owner of the subject property. I normally use inspection clauses and or clauses that state the funds check will not be cashed until all terms of the contract have been meet.
4. If Bank REO's are no good for wholesaling, what is the best method to find wholesale properties. I have read extensively in the marketing part of this forum, but would like to hear input from this group. I have a website with 4 domains currently: http://www.homes4cash.net, http://www.sold-quick.com, www. http://www.buy-quick.com, and http://close-fast.com. Should I use the newspaper, or any other ideas??
As stated before wholesaling is based on if purchased at a good percentage of market value.
5. Should I come up with my own purchase agreement, or rely on the one the realtor I have been using has?
Most realtors prefer to use their own contracts. No need to reinvent the wheel.
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For what I've seen in my local market as a Realtor, you CAN get REOs good for wholesaling but typically they go in a day or two after listed, if they aren't even sold before they're listed. You must build a solid relationship and look immediatly after listed in order to get the deals.
Good start, you found a guy to fund for local jobs in certain areas now MOVE ON.
Keep him for the areas he wants and advertise in your local Sunday paper for other investors. You will get "some" good calls but as you see you only need one for the other areas. Keep pushing, they are abundunt and out there and are also looking for guys like you.
Even if you they want to buy with you get a large finders fee but don't be too greedy. It is all about making money just dont be a stooge.
VIP. You apparently have to use other people because of either your credit or cash issue. When doing these deals start stock piling so you can do them yourself in the near future.
You can also sell your houses with a realtor instead of dumping for a nominal fee by doing the following with seller consessions.
1, give a $5,000 bonus to selling agent. They will flock to sell, and sell ONLY cash or conventional giving 2 to 3 weeks to close (you already have title) with no refund on EMD if they don't close on time.
2, give 5 to 10,000 back at closing to buyer. You will ultimately make more and sell very quickly.
Have fun, God is in control.
Rick,
Not sure of the numbers for the deals you are locating for your existing partners.
If the REOs are discounted enough then you can do the deal yourself using hard money. After a few deals you will have some working capital for more deals or you can keep a place every some many deals as a rental
If you can find deals at 65% of appraised 'as-is' value then you can easily obtain the cash. HML costs a bit but many times it will be less then a 50/50 split with a partner. You maintain more control in a HML situation also.
John
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