Using Notes to Build Capital

If you are currently directing your own retirement investments but are finding it hard to make money and stay within the limits of the maximum contribution limitations of the government, know that you are not alone. This is, in fact, one of the biggest complaints among people in your situation. However, it is possible to legally work your way around these rules and make a nice chunk of change for yourself in the process. The easiest way is by carefully purchasing and then using notes, also known as real estate securities. If you go about this in the correct way, you can make a ton of money and build capital.
You are probably already aware that many people sell notes, particularly trust deeds, which actually secure notes on real estate. Selling these notes carries with it burdens of its own for the seller, but it can be a great opportunity for you. The seller will not get the full amount the note is worth under any circumstances and he or she may also encounter capital gains and tax liabilities. Thus, selling a note is anything but “easy” or “effortless,” presenting a great opportunity for you to step in.
You can take advantage of the seller’s situation. As the investor, you can make a cash offer on a note. You must consider returns and equity while coming up with a reasonable figure, however, so it’s usually best to begin working with a lawyer or a financial advisor at this point. In fact, you might even consider hiring someone to help you find worthwhile notes to purchase. If the terms are drawn up correctly and your offer is accepted, this turns into a win-win situation for all involved. The seller gets cash immediately and you receive the note with some truly awesome interest and rates. This allows you to make a real profit.
There are some things to consider as you work toward this goal, however. First of all be careful with notes that are “second” notes or with property that is vacant or occupied by renters. While these are not necessarily always going to be bad situations, you do need to assess the risk level of the venture honestly before moving ahead with your decision. Also make sure that the current note holder has good credit and is trustworthy and is not selling you a note that you can’t do anything with. Talking to an expert in the field about these matters can help you significantly and can protect you as you go forward with your venture.
As with anything in this business, having the right people to help you along the way is key. Very few people are financial experts. There’s nothing wrong with that, but you don’t need to try and act as if you are. Employ the most knowledgeable people that you can find as you embark on this or any other financial journey, and we promise you’ll be satisfied with the results.

This entry was posted in Costa Rica and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *