Profit-Lesson
#2:
"The
Step-By-Step Process!"
By
Teddy Hanson
In the first lesson, you learned why the Note Business is so profitable,
so let's continue with lesson #2 and I'll show you the step-by-step
process from start to finish exactly "How You Can Make Big Money
Finding Mortgage Notes!"
Onward...
Profit-Lesson #2:
"The Step-by-step Process!"
Sally
Decides To Sell Her House
OK let's assume that Sally Seller (the seller) has decided for some
reason to sell her house and she puts it up for sale.
For
this lesson we'll stick with residential real estate, but the real
estate involved could be anything - commercial, apartments, mobile
homes, raw land, etc.
Sally
may try to sell her house herself or list it with a Realtor. We'll
assume, that she goes ahead and lists her house with a real estate
agent, like most of us would do in her situation.
Let's
further assume that Sally is asking $110,000 for her nice 3 bedroom
2-bath house that's located in an average neighborhood in Anytown
USA, that she has lived in for the last 11 years.
A
month goes by and she has not gotten an offer on her house. As you
know, real estate isn't always easy to sell especially in smaller
communities or if the seller is looking for close to full price.
So Sally is having a little difficulty selling her house.
Two
months go by, but still no offers. Sally is getting a little bit
worried and a tinsy bit desperate by now, and wonders if she's ever
going to get her house sold.
So
after two months on the market without an offer, Sally decides to
lower her asking price. She reduces it from $110,000 to $100,000.
Bud
Makes An Offer
Two weeks later she gets an offer from Bud Buyer (the buyer). Bud
has been looking for a house and he has $20,000 to put down. However,
Bud has had some problems with his credit and he hasn't been employed
with his current employer long enough to qualify for a regular bank
loan, (ouch).
Bud
decides to make a full price offer to Sally if he can get her to
carry the note (to act like a bank). So he makes an offer to buy
Sally's house for $100,000.
However,
because he is not able to get a bank loan he proposes the following
to Sally.
He
says he has $20,000 cash to put down and asks Sally to act as the
bank and to carry back a mortgage note for $80,000. Bud will pay
her 10% on her loan for the next 30 years, which amounts to a monthly
mortgage payment to Sally of $702.06.
Sally's
#1 goal is to sell her house! She realizes that it's a tough real
estate market where she lives and she is anxious to sell her house
so she goes ahead and accepts the offer from Bud Buyer. After all
it's a full price offer!
That's
it for now. Next I'll explain how we rescue Sally from here predicament.
Remember...