This E-zine is intended for anyone interested in financing the purchase or sale of a property. Whether you are looking for help with your first home purchase or something much more substantial, the insider tips, tricks, and techniques shared here will give you a very deep and personal understanding about the many ways to finance a property without the need for a bank or a mortgage lender.

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Everything is designed to help you achieve your goals of home sale or purchase with creative ways of financing your properties (single family or multi-family) with the innovative and effective use of promissory notes and other creative financing alternatives.

Already, the sale of most small businesses incorporates peer-to-peer lending and one in 13 American homes is purchased using these cash flow notes.

Currently, there are approximately $200 billion in real estate notes. In fact, there are so many cash flow notes in the U.S. alone that if you could find and purchase $1 million worth of notes every day, it would take more than 700 years to find them all.

The Bad News and the Good News

The bad news is many of these notes were poorly structured. Poorly structured means in order to move the property, the sellers accepted very small or no down payments. In too many instances the sellers did not conduct a credit check on their borrowers. Those two omissions are very difficult to overcome when a note holder discovers that he or she can actually sell their note for cash.

That of course is the good news. The notes can be sold for cash. Well constructed promissory notes can be sold for cash with a minimum discount. Poorly designed notes can also be sold for cash, but with a much larger discount.

In today's real estate market seller financed or peer-to-peer opportunities are in demand because the banks have shown an elevated reluctance to lend money. It is good to know that property sellers can actually provide the funding their property buyers need without the need of a bank or a mortgage lender. It is extremely important to your bottom line that you get the proper guidance with deal structuring and note creation. That choice will help you maximize your profit and minimize your discount. Think in terms of plus or minus 6% difference in the amount of cash you get to keep. Depending on your buyer's credit, the down payment, and the collateral the difference could be even more.

Be sure to take advantage of the resources that are available to help you with these very special requirements. Unless you sell property all the time you cannot be expected to understand the nuances of peer-to-peer or seller financing. Seek the help of professionals. It will be money well spent.

Housing that served the needs of a family of four or five may be a bit too much for an older couple to live in and comfortably maintain. If downsizing is a serious consideration, you may want to take advantage of the numerous benefits of a seller financed installment sale of your property.

Seller financing your property is one of the most effective ways to justify a full price property sale. Depending on the condition of your property, you may be able to get a small premium added to the sale price as well. In addition to a full price sale you are also entitled to an above market interest rate and a shorter pay-off than traditional mortgages. The interest rates will be determined by the credit profile and the down payment of your buyer. Here is an example of what you might expect from a buyer with the following profile:

Sale Price: $200,000
Down Payment: $20,000 (10%)
FICO Score: 655
N = 360
I/Y = 9.5%
PV = $160,000 (80%)
PMT = $1,345.37
Balloon Due Date: 120 months

In this case there is also a second mortgage of $20,000, which makes this loan configuration an 80-10-10. That simply means you have an 80% first mortgage, a 10% second mortgage, and a 10% down payment.

There are a lot of options available to you. Which one you select is determined by what your financial needs are for the property you will be moving into. In this illustration lets assume the $20,000 down payment is adequate.

You will receive $1,345.37 each month for ten years for a total of $161,444.44. Remember your mortgage amount was $160,000. In addition you will have the amount due from the balloon note which is $144,332.34. Here is the total of all passive funds you will have received at the end of just ten years:

Down Payment: $20,000
120 Payments: $161,444.44
Balloon Payment: $144,332.34

That totals $325,776.74 from a sale price of $200,000! One more thing, there is another $20,000 plus interest due from the second mortgage. In total you will have earned more than $350,000 from the installment sale of your seller financed property in only ten years!

In this illustration I did not include the interest payments due on the second mortgage. It is important to understand there are quite a few ways to structure these transactions. The best way is usually the one that will get you the most money in the shortest amount of time.

This is just one example of how money can be made and solutions are created, especially in the current stagnant housing conditions. The prevailing message is home sellers and home buyers can get home sales completed without the need for a bank or a mortgage lender. If a home buyer has been denied credit you might want to contact us to see what opportunities are available for you.