Posted on the cash flow board, but no reply - Posted by Philip

Posted by Steve-WA on July 13, 2003 at 22:23:06:

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Posted on the cash flow board, but no reply - Posted by Philip

Posted by Philip on July 12, 2003 at 12:21:34:

Before I spend big bucks to understand buying paper; I need to know at least some particle of what it is about.

Someone buys a $100,000.00 home.
They put $20,000.00 down.
They are loaned $80,000.00 by a bank.
They pay on it for 4 years and owe $70,000.00.
You can pay them $45,000.00 for their note.

So now you have their note…what do you get in exchange?

Do you get their debt…and their home?

Some type of cash flow?..immediately?
Real estate?

I don’t know the first thing about it…I thought I did, but I guess I don’t.

Philip

Re: Posted on the cash flow board, but no reply - Posted by Anne_ND

Posted by Anne_ND on July 12, 2003 at 15:43:24:

Hi Philip,

If you’re considering buying a course on notes, I suggest John Behle’s course “The Paper Game”- I bought it at my first CREOnline conference 4 years ago. His five day boot camp was very affordable and very informative when I took it 3 years ago. It changed my life in a profound way- both from the info, but especially through the other students I met at the course. Check out John Behle at papergame.com.

Understanding paper is very empowering when you do Lonnie deals.

good luck,
ANne

Re: Posted on the cash flow board, but no reply - Posted by Mr. C

Posted by Mr. C on July 12, 2003 at 15:11:19:

If you purchase the note, you become “the bank” (the lienholder)… all future payments come to you as cash flow.

180 - Posted by Steve-WA

Posted by Steve-WA on July 12, 2003 at 15:09:40:

Philip, buying the note is like when your bank sells your mortgage - the “new” bank is “buying the note”.

In your scenario, you would buy the payments from the bank - in this case, they wouldn’t do that - why would they? They are getting payments and interest.

Your people have $30K equity in their home - that’s all they own. The bank owns the other $70K as a “note”, so to speak.

In DOW, Lonnie talks about generating cash by selling a note. The note holder is the person that is owed; the note maker is the person that owes. You do not buy from the note maker, you buy from the note holder.

Any better?

Re: 180 - Posted by swwa for Philip

Posted by swwa for Philip on July 13, 2003 at 11:12:29:

right now i am having trouble posting online so I will answer this way.

Yes, this helps!
So do banks ever sell paper? Or only private financiers? Or finance companies?
What note holders sell paper? I guess it would be owner financiers?

Philip…and thanks a lot.

its calledf “short sale” - Posted by Steve-WA

Posted by Steve-WA on July 13, 2003 at 11:16:25:

If a bank wants to cut its losses on a bad debt, it may sell payments at a discount. If it is not a bad debt, then the bank is plenty fat & happy to let the loan run its course - why should they take a discount?

There are a million posts on the main board, and there are articles and courses on the short sale here, and all over the web.

If I may be so bold, if you want to immerse yourself in MH paper, creat it yourself for awhile - keep doing the Lonnie thing. Build your confidence, polish your cookie cutter, spend a little profit on education, and then foray into other areas.

IMHO

Re: its calledf “short sale” - Posted by Philip

Posted by Philip on July 13, 2003 at 19:27:51:

Ahhhh…I see.
I agree with the stick to one thing first. I was just trying to understand how it worked a little bit.

Seems to me buying someone’s note at a discount is kinda like giving them a belated “cash” price, since they are going to receive a lump sum instead of payments…therefore the discount is well deserved.
Thanks a lot.

Philip