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The following was written by guest blogger WJ Mencarow , Founder of The Paper Source.
As a current professional and veteran in the performing seller-financed note industry I would like to share with you one way that you can start to build towards your retirement by purchasing seller-financed notes. Here’s an example to demonstrate this retirement-building method.
Real Estate Secured Note Case Study
In this real-life example, the property securing the note is ¾ of an acre of improved land in Hesperia, California. It sold for $30,000 with a $6,000 down payment and the seller carried back the note for $24,000 at 8-percent interest amortized for 10 years with a monthly payment of $291.19.
When the note holder wanted to gauge the investor’s interest in purchasing it, she had already received 17 payments, leaving 103 payments remaining and a current principal balance of $21,646.83.
In doing extensive due diligence, the investor found the buyer was a builder and had already started to build a home on the property. The property buyer’s/note payors’ credit was excellent, the title was clean, clear, and up-to-date with no issues, and the appraisal came in for much more than the sales price of the property.