By: Troy Fullwood

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

By: Troy Fullwood

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

By: Troy Fullwood

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

By: Troy Fullwood

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

By: Troy Fullwood

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

Written By: Troy Fullwood

Real estate notes are backed by mortgages. The borrower secures the loan by ensuring repayment. The borrower will guarantee the repayment securing the new loan with their mortgage. These are openly traded, giving investors a lucrative opportunity.

The Types of Real Estate Notes
There are numerous types of real estate notes that exist. They are all backed by a real estate holding. Some examples include land sale contracts, promissory notes, and trust deeds and deeds contracts.

Investors have access to both first and second notes. The first notes are the first notes taken on a mortgage. This means they are freshly created and the investor has to determine the valuation on their own. They must consider factors like the escrow fees, property taxes, homeowner’s association, and insurance.

How Do People Profit Off Real Estate Notes?
The seller of the note will showcase the investment opportunity in a broker or capital financing firm. Investors can view these investment listings through these firms. The seller gives up debt repayment collection rights once an investor makes payment. This gives the investor the ability to claim the repayments, scoring a healthy profit in the process.

It is possible to turn a huge profit while investing as sellers often post their investment opportunities for discounts of as much as 20 to 30 percent.
Are Real Estate Notes Safe Investments?

Investors with no experience in real estate notes are better of trying the second notes first. These are simply notes guaranteeing the repayment of the lien. The lender is betting on the borrower coming good on the payment schedule. They can cash in on their investment early, while giving another investor a piece of the pie. The bigger profits come from first notes, but bigger losses are possible as well, so it is important to get a lot of experience.

Another risk with real estate notes is that the money is all pooled into a single bet, instead of spreading it out. Junior liens can clear in bankruptcy court when their appraised value doesn’t reach a high enough level to back the lien’s debt. This is another inherent risk of real estate note investing, which every investor must consider.

Performing and Non-Performing Notes
Investors have access to both “performing” and “non-performing” notes. The performing notes are those which are backed by a mortgage that is up to date on its payment schedule. A non-performing note is one with payments that are not up to date. It takes a full year of making payments on schedule before it becomes a performing note again.

Conclusion: Are Real Estate Notes Worth the Investment? 
Real estate notes are a lucrative investment opportunity. They are best left in the hands of those with a mid-to-high tolerance risk. The most important part is taking the time to learn the investment dynamics and understand what to look for in a deal. Maximizing return potential is the first step, then learning how to filter the deals comes next. With the right patience and risk tolerance, any investor can score huge returns with real estate notes.

To learn more, you can grab a copy of my book Power of Paper from Amazon

Follow us on FaceBook to see what we are up to!

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

Written By: Troy Fullwood

Since the end of the Second World War, man has sunk his efforts in an endless effort to secure more money and gain more profitability. This implies that any viable investment opportunity is worth pursuing, putting in mind that fluctuation may chew away the benefits over time. One of the major upcoming investment industries is the real estate sector, which has been booming and continues to espouse the same trends since the nineteen seventies. The question here is whether this niche is worth the money or it is a mere white elephant. There are more than a dozen reasons why placing your money here is worthwhile and here we examine the top five reasons you should pursue this path.

Investment in real estate is always appreciating over time. Any investor is definitely looking for a place to put their money and watch it grow. Human population continues to surge while natural resources remain at the same rate. This puts immense pressure on land, which is the basic resource of investment in real estate. This implies that persons on the hunt for a sure opportunity that will help them balloon their investments can rely on this niche as a good bet.

The periodic cash inflows generated by real estate are another reason this investment is worth the effort. Most of the investors prefer an investment opportunity that guarantees regular payments over time. This is important in that it highly reduces the risks associated with such investments and provides a regular source of income to the investors. Again, if you are looking for a place to put your money and generate income over time, whether for sustenance or re-investment then real estate is worth your money.

Real estate is one of the key industries that are highly favored by tax relief and advantages. You definitely know just too well the impact of taxation is on an investment, chewing part of the proceeds and leaving you with less money at the end of the day. However, real estate enjoys a good spell of tax advantages. This makes it an attractive avenue to the investors who want to reap more money and increase their net take-home amounts. One may also file tax deductions if they are using part of the home as their office, which dramatically reduces the cost of tax that one has to pay at the end of the day.

Every investor has dreams of sailing beyond the foreseeable investment limits. However, money is in most cases an obstacle on the way to achieving these important goals. This forces most of the investors to turn to creditors to finance their investments in terms of loans, overdrafts and other forms of assistance. Real estate is an investment opportunity highly regarded by creditors. One may use their property as a security when seeking credit from financiers, which is a major boost to the credit score. It is also common knowledge that a home loan attracts lower interest rates than most other forms of loans.

To learn more, you can grab a copy of my book Power of Paper from Amazon

Follow us on FaceBook to see what we are up to!

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

Written By: Troy Fullwood

With many people depending on the savings account as a pillow for their retirement structure, more and more people are usually left in turmoil. This is for the simple reason that the returns do not come out as planned, thus the dreams dreamt are often shuttered making more people depend more on the social security. However to be set apart from the rest investing in mortgage notes is just the way to go.

Returns 

With a secondary investment pulled in for hard workers, one is sure to get in the desired amount of money needed for whatever they need. On the other hand in a good market, the mortgage notes bring in a boom from the marketed area. This literally means that tan increase in value of the area where the mortgage houses lay ensures that there are no decreases in the profits enjoyed. Acting as a private mortgage notes holder, one can minimize the risks that come in with the mortgages. This actually in facts means that the savings on the investment notes purchased are minimized as the said returns are set by the mortgage notes holder. This enables that the investment set is familiar and achievable, thus the chances of losing anything is significantly reduced. When it comes to non- payment and repeated defaults by the one living in the premises, repurchasing of the premises is allowed this way, one gets to enjoy the money and get their property back by and large. This creates room for reselling to another payer thus making another note if possible. If this is not possible selling for cash is another option and investing in another property can happen as and when wanted.

Risks

Just like any investment there are a number of risks involved when going on for mortgage notes. When it comes to risks, mortgage note owners find that they are the same as the returns. The most obvious is that the value of the asset so to speak does not go up. This literally means that in the years to come investment may go down and as that scared of many potential investors. However in the case of an influx in the market and an area is surveyed upwards the value may go up again. This can cause a reverse in the said returns and make them go higher even though the chances are usually unlikely. Another is getting a stable cash flow from the property. This usually comes in the form of rent. Since rent has to cover and be in excess of the mortgage and all its expenses. The risk comes in if the cash flow isn’t high enough making payments difficult on cover.

Since mortgage notes can also be bought in part, the entire risk is reduced even further making the purchase returns even more worth it. However when every potential Mortgage owner thinks about it, the returns would not come in handy if there were no risks involved. Ensuring that the mortgaged houses are in good and very hospitable conditions to live in, this way the rent will always be more than the required payments including the taxes and insurance. This in the end gives off good returns and stable security pillows that are far better than the traditional savings in accounts.

To learn more, you can grab a copy of my book Power of Paper from Amazon

Follow us on FaceBook to see what we are up to!

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

Written By: Troy Fullwood

Credit plays a big role when it comes to notes. You still have to have good credit, and we look at this in length. What’s driving this person’s credit down? Is it the fact they went through a tough season and they haven’t taken time to re-establish credit? Are the issues on their credit old issues? Are they recent issues? Are they medical issues? Are they credit card issues? Are they child support issues? What’s actually doing the damage that is bringing the credit score down? Is it something that they can easily rectify? If they had an extra $1,500, could they pay off these three or four accounts which would in turn raise their credit score? The point being is that most of these things are very solvable challenges with a home buyer.

The question then becomes if they are willing to do the deal. Is the note seller willing to help them or are we just buying it as is? Because ultimately notes are sold as is. There are no reps, there are no warrants. When we purchase it, we purchase it in its entirety. We can do partials, but even partials are purchased in their entirety. With that being said, now we’ve got full responsibility over that particular investment and with that we now have to understand we are actually investing in, meaning that homeowner, that particular property, and his or her ability to repay us in a timely fashion.

It has never been our goal in business to take somebody’s property. That is not a model to us at any level. That is a costly, expensive, time consuming legal hassle that is part of the industry, but it shouldn’t be the main part of the industry. That is always something that we strive to address in the early stages of reviewing a note deal. Now no matter which category of a seller we are working with, whether it’s somebody that wants par or somebody who thinks they’ll only get 20 cents on the dollar, or somebody that’s very reasonable and has done a couple of deals, one of the things we always want to see on the front side is the borrower’s credit.

The easiest indicator to determining the value of the note is a borrower’s credit, not to mention you can get a copy of their credit relatively easy and relatively inexpensive. That is a key element just like everything else that we deal with as consumers. One of the first things any creditor wants to know about you and me or anybody else is what our credit is so that they know if or how to work with us within our request, whether that’s buying a cellphone, getting health insurance, buying a house, a car, etc.

So, when we are first talking with a seller, we want to get the basic numbers of the deal. We want to get a copy of the borrower’s credit and then we have a little in-house mortgage worksheet that we use, and we fill it out or the seller can fill it out. We actually prefer that the seller fills it out, so it is more accurate and we don’t overlook something and make an honest mistake. But with that, we can in turn determine whether or not this is a deal that we can work with and help that seller accomplish that goal.

Now why do we do it that way? Well, it’s simple. We do it that way because we want to put the best pricing possible and the most honest and accurate pricing possible upfront and on the table. What happens a lot of times is people will overprice the deal only to find out two weeks later that the borrower’s credit is not a 640, it’s a 550. Now they have to change the offer and ultimately that doesn’t sit well with sellers. It doesn’t sit well with anybody involved in the deal and I see most of the time those deals fall apart and they never get done because now the trust between the parties has been breached and broken and now nobody wants to work with each other. Or if they do work with each other, they work with each other to get the deal done and then they never do business again.
Now, there’s a lot of flaws in that. I’m not saying one party is better than the other when you’re dealing with a buyer and seller doing it that way. I have just learned after 21 years that if you can get some really high-quality information upfront, more accurate information, that ultimately, you’re going to have a more accurate quote and have a much smoother deal from beginning to end.

The other side of that equation is we want to make sure, especially on newly created deals, that the home buyer has the ability to repay. We want to look at their debt to income ratio. We want to make sure that they are not making $3,000 a month and their mortgage payment is $1,500 a month. That’s not a debt ratio that we can live with. What we’re typically looking to do, and although we can actually go above this, we like to keep the debt to income ratio right around 36 to 38%. We have found that that’s a very comfortable ratio for the homeowner. It’s also a very comfortable ratio for us and it helps us to avoid any future defects in the note and any future foreclosure possibilities associated with that note.

Now, once the deal is done, meaning that it is a seasoned deal, say one or two payments, we can’t change the terms of the deal but we can still look at their debt to income ratio on the deal to determine whether or not that’s a deal that we would want to purchase. We usually do that through looking at a 1003. We encourage all sellers to get a 1003, fill it out and then have that on file internally and use it for their own debt to income ratio as well.

A 1003 is a standard industry credit application. Most people have seen them if they have gone and applied for a mortgage loan at a bank or a mortgage broker and you can easily get one by going online. In that 1003, you will see everything from the address of the property, the type of property, the borrower’s information, the co-borrower’s information meaning name, address, social security number, job information. It also gets into their liabilities, into their assets, what their current rent or mortgage is, what their proposed mortgage is going to be. It gets into several questions about foreclosures and bankruptcies. So, it’s an all-inclusive credit application that once the note holder has that, they have very extensive information on that borrower which helps them to put together a higher quality file.

To learn more, you can grab a copy of my book Power of Paper from Amazon

Follow us on FaceBook to see what we are up to!

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved

Written By: Troy Fullwood

Credit plays a big role when it comes to notes. You still have to have good credit, and we look at this in length. What’s driving this person’s credit down? Is it the fact they went through a tough season and they haven’t taken time to re-establish credit? Are the issues on their credit old issues? Are they recent issues? Are they medical issues? Are they credit card issues? Are they child support issues? What’s actually doing the damage that is bringing the credit score down? Is it something that they can easily rectify? If they had an extra $1,500, could they pay off these three or four accounts which would in turn raise their credit score? The point being is that most of these things are very solvable challenges with a home buyer.

The question then becomes if they are willing to do the deal. Is the note seller willing to help them or are we just buying it as is? Because ultimately notes are sold as is. There are no reps, there are no warrants. When we purchase it, we purchase it in its entirety. We can do partials, but even partials are purchased in their entirety. With that being said, now we’ve got full responsibility over that particular investment and with that we now have to understand we are actually investing in, meaning that homeowner, that particular property, and his or her ability to repay us in a timely fashion.

It has never been our goal in business to take somebody’s property. That is not a model to us at any level. That is a costly, expensive, time consuming legal hassle that is part of the industry, but it shouldn’t be the main part of the industry. That is always something that we strive to address in the early stages of reviewing a note deal. Now no matter which category of a seller we are working with, whether it’s somebody that wants par or somebody who thinks they’ll only get 20 cents on the dollar, or somebody that’s very reasonable and has done a couple of deals, one of the things we always want to see on the front side is the borrower’s credit.

The easiest indicator to determining the value of the note is a borrower’s credit, not to mention you can get a copy of their credit relatively easy and relatively inexpensive. That is a key element just like everything else that we deal with as consumers. One of the first things any creditor wants to know about you and me or anybody else is what our credit is so that they know if or how to work with us within our request, whether that’s buying a cellphone, getting health insurance, buying a house, a car, etc.

So, when we are first talking with a seller, we want to get the basic numbers of the deal. We want to get a copy of the borrower’s credit and then we have a little in-house mortgage worksheet that we use, and we fill it out or the seller can fill it out. We actually prefer that the seller fills it out, so it is more accurate and we don’t overlook something and make an honest mistake. But with that, we can in turn determine whether or not this is a deal that we can work with and help that seller accomplish that goal.

Now why do we do it that way? Well, it’s simple. We do it that way because we want to put the best pricing possible and the most honest and accurate pricing possible upfront and on the table. What happens a lot of times is people will overprice the deal only to find out two weeks later that the borrower’s credit is not a 640, it’s a 550. Now they have to change the offer and ultimately that doesn’t sit well with sellers. It doesn’t sit well with anybody involved in the deal and I see most of the time those deals fall apart and they never get done because now the trust between the parties has been breached and broken and now nobody wants to work with each other. Or if they do work with each other, they work with each other to get the deal done and then they never do business again.
Now, there’s a lot of flaws in that. I’m not saying one party is better than the other when you’re dealing with a buyer and seller doing it that way. I have just learned after 21 years that if you can get some really high-quality information upfront, more accurate information, that ultimately, you’re going to have a more accurate quote and have a much smoother deal from beginning to end.

The other side of that equation is we want to make sure, especially on newly created deals, that the home buyer has the ability to repay. We want to look at their debt to income ratio. We want to make sure that they are not making $3,000 a month and their mortgage payment is $1,500 a month. That’s not a debt ratio that we can live with. What we’re typically looking to do, and although we can actually go above this, we like to keep the debt to income ratio right around 36 to 38%. We have found that that’s a very comfortable ratio for the homeowner. It’s also a very comfortable ratio for us and it helps us to avoid any future defects in the note and any future foreclosure possibilities associated with that note.

Now, once the deal is done, meaning that it is a seasoned deal, say one or two payments, we can’t change the terms of the deal but we can still look at their debt to income ratio on the deal to determine whether or not that’s a deal that we would want to purchase. We usually do that through looking at a 1003. We encourage all sellers to get a 1003, fill it out and then have that on file internally and use it for their own debt to income ratio as well.

A 1003 is a standard industry credit application. Most people have seen them if they have gone and applied for a mortgage loan at a bank or a mortgage broker and you can easily get one by going online. In that 1003, you will see everything from the address of the property, the type of property, the borrower’s information, the co-borrower’s information meaning name, address, social security number, job information. It also gets into their liabilities, into their assets, what their current rent or mortgage is, what their proposed mortgage is going to be. It gets into several questions about foreclosures and bankruptcies. So, it’s an all-inclusive credit application that once the note holder has that, they have very extensive information on that borrower which helps them to put together a higher quality file.

To learn more, you can grab a copy of my book Power of Paper from Amazon

Follow us on FaceBook to see what we are up to!

Feel Free to Share...

Copyright © The Campanile Group dba Pinnacle Investments · All Rights Reserved