Quote: (04-13-2013 08:47 PM)thegmanifesto Wrote:
Quote: (04-13-2013 08:16 PM)renotime Wrote:
Performing Notes and Non Performing Notes have solid 15-20 percent yields.
If you live in a big city you could join a real estate investment club and find something.
I bought a note last year for 10,400. I will receive my final payment in march of 2015. I'll make a little over 3k on the deal.
You could do some damage with 50k.
Break this down a little more.
The note is for a mobile home in Texas.
Essentially, I am acting as the bank. The guy that lives in the trailer makes a monthly payment to me for 361.80 a month until the note is paid off. If he fails to make payments, I repossess the home and resell the home on a note again. If you have all the proper paperwork it's pretty simple to take the home back, although I have never had to do this.
So there are a couple of ways to do this:
You can buy a mobile home in a park for a few grand and sell it on a note on your own. People that live in mobile homes typically are unable to get loans from a bank, hence you act as a bank and charge a higher interest rate, usually 12-15 percent. This method takes a fair amount of due diligence, but is certainly doable. I have tried to do these types of deals, but haven't been able to find many in my area. I would recommend reading "Deals on Wheels" by Lonnie Scruggs for more in depth information. So, in theory, you could buy a mobile home for 6k, turn around and sell it for 12k at 12-15 percent interest and structure the note to your choosing.
This a thread on a guy that did them that way:
http://forumserver.twoplustwo.com/30/bus...al-456742/
Another way to do it is to buy the note off the guy that has already done the work for you, which I did. Yeah, you will be leaving more money on the table, but you can get the deal done way quicker. You can still make 15-20 percent yield over the course of a few years.
The third option is to do all the foot work yourself, i.e. buying and selling the mobile home, structuring the note, and then selling said note off for a quick profit.
My due diligence was fairly straight forward, which entailed signing and notarizing a few documents and sending a cashier's check. You could hire a lawyer to arrange the documents, but I did not.
Is this 100 percent fail safe? Well, no. The mobile home could burn to the fucking ground and I was too lazy to get fire insurance for the place. He could decide to stop making payments and tear the place up before I repossess the home. Overall, though, I think it's a solid investment.
I was able to find this deal through a mutual friend. Since then, the guy has offered to sell me like 14 notes. If I had the money I probably would have done them.
You could probably find similar deals through Craigslist and local real estate investment clubs.
Feel free to pm if anyone has any other questions.