Jump-Start Your Investing Cash Flow
Promissory Notes & Mortgage Notes Are The Tool
by Lawrence Tepper, CCIM
All traditional investments are now paying very low yields. Current conditions
do not favor the traditional investments. During the past three years most investors have experienced difficulties and some losses. Investing for cash-flow has become a challenging task. The markets have been volatile, erratic, and dangerous. Stocks, bonds, mutual funds, exchange traded funds, oil, natural-gas, and commodities have all suffered.
Is there a “safe haven”?
Is there a cash-flowing investment that is safer than the average investment offered by Wall Street?
The answer is yes!
One of the best and safest cash-flow investments is ownership in a well secured promissory note or
mortgage note. The reasons why a note can be very safe are:1) a capable borrower has promised repayment of your investment;
2) a salable, well located real estate property secures your investment;
3) a margin of safety (resulting from what is invested in the note being
about 25% less than the market value of the real estate collateral security)
is protecting your investment.
Where can the typical promissory note investor find investing opportunities?
There are several good sources. In today’s real estate and
lending environment, one of the best sources is the Realtor™ community.
Realtors need private money note investors to put deals together when
the banks say no. Today, regulators have restricted many banks from making
the loans that they previously made. Additionally, many banks are reluctant
to lend because of their past bad experiences with no-pay, slowpay,
and irregular-pay borrowers. Right now, private lenders have the
door wide-open for them to step in and make good, secured, cashflowing
mortgage note loans. When the banks say no, you can jump in and say yes!
Because of the recent financial turmoil, Realtors that have a
willing buyer and a willing seller may not have a willing bank lender
to close the transaction; they need a private promissory note lender to
close their deal and get their commission. All of the parities to the
deal are strongly motivated to close; they are all very willing to
cooperate with a willing and able lender.
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