dim bulb, please shed a little light - Posted by Philip

Posted by jim jr on July 13, 2003 at 08:35:56:

If you give someone $32,000 for a note(the note obviously valued at more $32,000), you will then receive the payments on the note instead of the previous note holder. You will receive an agreed upon interest rate on your investment and over time you will receive more than you invested. The note holder would sell you their note in order to get a lump sum, and then you will receive interest on your investment. You can purchase all or part of an existing note. I hope that helps; I am new myself.

dim bulb, please shed a little light - Posted by Philip

Posted by Philip on July 11, 2003 at 24:57:35:

I guess I just don’t understand buying and selling paper.

You are buying a prommissory note. Do lenders allow that?
Does that make you liable if the homebuyer defaults? If it is just the paper, havent you just bought someone else’s debt? Is that how it works?

OR IS IT LIKE THIS…they give you the real estate for the cash payment for the note?

100,000.00 house
80,000.00 original note
60,000.00 left on the note
the note dictates that you can only pay…
32,000.00 for the note…

so you have spent 32,000.00 and how does that benefit you?
Do you now own the actual real estate?
Do you now sell for what is now hopefully a 110,000.00 home, pay off the 60k, and the 32k back to yourself…and profit by 18k?

Is that the general idea?
I really am lost here.