12 Great Things About Successful Real Estate Note Holders
BATTLECALL GUEST EXPERT: Richard Wills, Charter
West Investments
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.
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?
Got an opinion? We want to hear from you. Post your thoughts or comments here in our Mortgage Warrior Forum. Come join the conversation and say hello...onward mortgage warrior!
| 
Join Now Warriors Wanted
