Investing in Mortgages, Trust Deeds, or Contracts
It is not difficult. It’s just you loaning your money to another party. The loan is secured by a Mortgage, Trust Deed or Contract, on Real Estate. There are different ways you can invest in these loans. You can make the loan yourself to another party or you can buy an existing loan. There are several different names for these security instruments, and they are structured differently as well. Let’s briefly examine some of them. READ MORE
Paper Magic
Next To Cash (and sometimes BETTER than cash), paper (Mortgages, Notes, Deeds of Trust, Land Contracts, etc.) is the most flexible negotiation instrument in the buying and selling of Real Estate. In our last discussion I stated that the creation of paper (wherein a seller finances the property purchase for the buyer by taking back a mortgage) seemed to benefit the buyer more than the seller, but this type of transaction can greatly benefit the seller also.
Example: Seller owns a property that just can’t seem to get sold. Maybe just because of the slow market or because it’s unfinanceable by an institutional lender because it’s land, mobile home & land, and any number of other reasons. READ MORE
Private Mortgages
PRIVATE MORTGAGES: These are debt instruments that are created when a seller sells a real estate property to a buyer and finances the property for the buyer. Example: Mr. Jones sells a house to Mr. & Mrs. Smith for $100,000. Mr. Jones agrees to accept $10,000 cash as a down payment and to carry back a note or mortgage for $90,000 payable at $789.81 per month for thirty years.The debt instruments may be in many different forms and have different names depending primarily in what part of the country the transaction takes place. Some of the various names include: Mortgage, Note & Deed of Trust, Land Contract, Agreement of Sale, Contract for Deed, etc. They all have one thing in common. That is, they are created when a seller sells a real estate property and finances it for the buyer. READ MORE
