The concept of note brokering, or converting a stream of payments, secured by a mortgage, to up-front cash can be done with discounted notes.

The main reason why an owner of a property will sell with owner financing is to earn more money on their money. The most common reason is when a buyer can not qualify for traditional financing. The benefit to the seller is that they can often get a higher rate of return on his/her money.

Another option is that a seller can have a buyer qualify for a traditional first mortgage on part of the sales amount, and then offer to take back a second mortgage to cover the balance. This often lets the seller get a higher price for his property, while letting the buyer still qualify for a mortgage.

If an owner sells a property with owner financing the owner is basically considered the mortgage company. But what happens if the seller who is holding a note and collecting monthly payments from his buyer decides that he/she wants to now use the money for something else, some other investment or financial need, or simply decides that collecting payments is not all that fun? Often times they want to sell the note.

Some note-owners have no idea that they can get cash for their note (discounted of course) or they do not know where to start. As a note broker your job is to introduce note buyers and note sellers and collect a fee for your service.

Popular ways to find those holding mortgages is to

1) Run a classified ad (in the Real Estate Services section of your newspaper) looking for note holders or

2) Direct mail or

3) The World Wide Web.

Use the public records of recorded mortgages to find those who are carrying a note. Since all mortgages and trust deeds are filed in the county clerk’s office this information is available to the public. Next, where do you find buyers for these notes? The same way actually; use ads, direct mail, and the web.

Lastly, the internet has made research in general and this whole process even easier now than ever before. You can simply type note holder or note buyer or note broker into your favorite search engine. Look through the results, read and find out how each of their programs work. You can find buyers, find sellers and of course make sure you know how you (as the note broker) will get paid when you broker a successful deal.

Caffeinated Content

Real Estate Investing is a sure fire way to earn some serious cash. Napoleon Hill in his book “Think and Grow Rich” identified that more people earned and held their money in real estate than any other vehicle. You can make quick returns on your money, as well as hold properties for long term appreciation. The return on your money far outweighs the pennies you earn on mutual funds and most 401k plans.

All wealthy people invest in real estate, no matter how they obtained their wealth. In some fashion, they will invest in real estate simply because it is the best way of perpetuating huge returns on their money. Donald Trump, Bill Gates, Warren Buffet and countless other wealthy people, all own several properties all across the world. This is no coincidence.

What makes real estate investing so attractive, is the ease in which it can be done. You don’t have to be a licensed realtor, and with so many different methods of investing, you will never be at a loss for deals. And the best part is that it does not take money to begin investing in real estate. All you need to do is learn from someone who has the experience and know how, and the ability to help you through your first deal.

It’s easy to purchase a course on real estate investment, but the reason so many people fail to ever actually buy one property, is because they lack a mentor and a mastermind team. Think how much easier it would be to buy that first property with someone helping you through the transaction.

And to get the quality life that you have always been wanted and the one that you truly deserve is by getting into the game of the real estate investing world.

Real estate loans give us the break to purchase property while putting very little, if any, of our own money down. It appears that “banks believe real estate is a safe venture.” It is also a fast-growing industry and always in demand. Population is very much on the rise so there is always the need for residential properties and the inflation is high.

The massiveness of the world’s assets is in real estate. It is an exceedingly expensive product. Each sale you make produces more profit potential for this reason.

There is no other vehicle that has produced more wealth than real estate investing. If you are planning on accumulating enough wealth to retire on and take care of your family, real estate should be a big part of that planning. I am surrounded by people in the investing community that just can’t seem to get started and then there are their neighbors that are making over $100,000 a month working part time. As I stated before, a big part of that is not having clearly defined and written goals, and if you did that already then you have probably moved into the top 10% already.

So make the decision to get in on this lucrative business today, you can’t afford not to!

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Is real estate investing a bad bet in today’s economy or does the media just love doom ‘n gloom stories? Take a look at what leading economists say about the real estate market.

Statistics Challenge Murky Media Coverage

We’ve all been bombarded recently by reports in the various media about how the real estate boom of the past few years is over. Whether you read it in the newspaper or a magazine or see it on television, it seems as if the media has decided the real estate bubble has burst and the housing market is in the initial stages of a major swoon. Not so fast, say a number of leading economists who are challenging the negative view being portrayed in the media.

If you look at the numbers, they seem to back the opinion of the economists. For instance, the median home price across the country has dropped only 1.7 percent in 2006. That statistic certainly doesn’t signify a bust in the real estate market. They way property values have been increasing over the past decade, that figure is more of a bump in the road than a major disaster. Most homeowners are still far ahead, even with the slight decline in home prices they experienced this year.

According to most economists, America’s housing market is simply undergoing a badly needed price correction after five years of record-breaking sales and double-digit appreciation. It’s really more of a confirmation of the soundness of our supply and demand economy than the catastrophe being reported by the media.

Even the Federal Reserve’s vice chairman, Donald L. Kohn, recently told a group of New York analysts that the Fed expects the recent housing correction to be much less dramatic than the media would have us believe, and that the correction will be relatively short-lived.

Interestingly, Kohn’s speech received hardly any mainstream media coverage. Kohn told his audience that the current downturn may actually be good for the economy as a whole, because it represents a chance for America’s supply and demand system to rebalance in areas that have seen dramatic increases over the past few years, allowing buyers who may have been priced out of their desired neighborhoods to begin looking for homes again.

Encouraging Economic Factors

There are other factors that may also spur a fairly quick market recovery, including the number of new households being formed and an increasing population. Kohn believes that the inevitable turnaround should begin relatively soon. Statistics from the National Association of Realtors (NAR) also would seem to back up Kohn’s optimism. Kohn’s same optimism is also supported by the fact that long-term mortgage rates are only about a percentage point above historic lows.

The recent decline in both gas prices and the country’s unemployment rate both indicate that Americans are better positioned to make their house payments. To further debunk the doom-and-gloom predictions of a housing swoon, the Fed has stopped raising interest rates, as well, which indicates that they are comfortable with the situation.

So the next time you turn on your television and hear about the catastrophic condition of America’s housing market, remember that you can’t believe everything you hear. The actual figures simply don’t support what the media is reporting.

More on Arizona Real Estate.

So, how do you calculate positive cash flow on a real estate investment? Are you saying that cash flow is the difference between the monthly rent amount and your mortgage payment? If so, shame on you.

There are more expenses to running a rental property other than the mortgage payment. Most banks use 75% of the monthly rent amount as a guide for what they believe to be a better indication of what you’ll actually take to the bottom line. For example, if the monthly rent is $1,000 per month, they will say that you have $750 per month of income.

So, where does that other 25% go? Well, it goes toward maintenance, vacancy, management, taxes, insurance, legal, accounting and the other expenses you would from running a business-and don’t be fooled; real estate investing IS a business.

There is a calculation that is used often in commercial real estate investing that a few of us have adapted to the residential real estate investing world: net operating income.

Net operating income calculations involved determine what the true income is from the property (not including the mortgage payment).

So, if you had a $1,000 per month rental income and subtracted the taxes, insurance, a reasonable estimate of the effect of vacancies, maintenance and management, the number you are left with is your net operating income for that property.

If we calculate this number first, we can use a financial calculator to determine what the most debt a property can support with that monthly payment and the interest rate we can borrow at.

If the amount we can borrow is greater than the purchase price (minus whatever we are prepared to use as a down payment), then we can honestly say the property looks like it has a positive cash flow. If it is lower than the purchase price, then we know that we need to put more money down or that we have a negative cash flow which is really, in my mind, like making a down payment over time.

So, next time you do your analysis of an investment property, I encourage you to do your own net operating income calculation to determine the cash flow on the potential real estate deal.

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