INVESTORS, CONTRACTORS, & DEVELOPERS
Welcome to our investors, contractors & developers section - - -
We have created this section to give you an idea of how a cash flow system would work for you. Many times the way the cash flow systems works for one of the above it could work for all three.
The investor who understands the time value of money and the power of cash flows will be the investor who gets very rich. A Newsweek financial writer has said "the two most powerful forces in the world are gravity and the time value of money." Few investors really understand that power. A financial calculator is one of the best tools anyone with an interest in real estate can own. The books that come with the financial calculators make most functions easy to understand. Mortgage tables are obsolete. Through the hand-on use of a financial calculator you can learn:
To try to understand the way notes work see Understanding a mortgage note and the Creation of Paper. Click here to get to our Forms page. Select the applicable quote and fill it out. Still Have
Questions?
Call us at 413-592-3381, send us an email at richard@maxicash.com or request a phone call from us.
Contractors may do a major job for a homeowner, like putting in a swimming pool, building a deck, remodeling a kitchen, adding a room, or anything else you can imagine. If the job is big enough, the homeowner may ask the contractor to carry part of the cost, perhaps a large part. The contractor may agree for a number of reason. If he has good cash reserves, a portfolio of liens that pay each month may provide good cash flow stability for the business. More often, however, the contractor needs to keep the crew working and needs both jobs and cash to do so. The homeowner may say something like "I want to remodel my kitchen, and I have $5,000. to put down on it. Can you carry the balance as a lien against my house?" The lien is a mortgage note (paper) secured by the property and so it is just as valuable. The only difference is that no sale of property has taken place and it is called home improvement paper. The contractor needs the job, so he agrees. If the issue of the paper is brought up before the contractor quotes a price, however, he may quote a higher price to cover the cost of selling the paper. The contractor knows the only way to get cash is to sell the note, which won't sell for its face value. (time value of money) If the note issue comes up after a price has been quoted he may point out that if he has to carry paper the price will have to be higher. In this deal the homeowner had paid $5,000 down on a $30,000 kitchen remodeling project, giving the contractor a $25,000 second mortgage. It cost the contractor a lot more than $5,000 for the materials and labor to do all the work of remodeling the kitchen. He needs his money as soon as possible, so he sets up the mortgage note to be attractive to National Notebuyers. He also protected himself in the event he could not sell the note for one reason or the other. The mortgage he accepted was amortized over fifteen years, with a payment of $20,454.11 due at the end of five years. That meant sixty payments of $275 (five years until the balloon) and then the balloon. The mortgage in reality had two parts:
He came to National Notebuyers and asked.
After looking at the items needed to close and the loan-to-value ratio and other factors, it was decided that this was a good deal. After negotiating with the contractor and the usual dickering back and forth there was an agreement of a price of $15,000. and he walked away from closing with the money in his pocket. If you still Have
Questions?
Click here to get to our Forms page. Select the applicable quote and fill it out. Call us at 413-592-3381, send us an email at richard@maxicash.com or request a phone call from us. Developers will usually hold paper on something they have developed. They are constantly running from project to project and subsequently from construction loan to construction loan. They know the power of time value of money and have good knowledge on the creation of paper .
The developer advertises his/her property with "SELLER FINANCING" increasing his/her market response by 1/3 by offering :
EXAMPLE AD TO BE PLACED IN LOCAL NEWSPAPER:HAVE IT SOLD IN 1 MONTH: FOR SALE BY OWNER ASSISTANCE PROGRAM Seller Advertises with Seller Financing
National Notebuyers does all the rest, including:
Have Questions? Call us at 413-592-3381, send us an email at richard@maxicash.com or request a phone call from us. Click here to get to our Forms page. Select the applicable quote and fill it out. Top
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