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The real estate market is reaching a peak in its cycle. Investors are seeing a tightening market in many major asset classes, especially in residential and commercial multifamily markets. You may be wondering how you can find deals offering great value for your investment; it may be time to start thinking outside the box.

Did you know that buying notes can be a great alternative real estate investment strategy? Instead of buying a property, you buy and hold the debt on the property. With proper understanding of buying notes, this method can be a great alternative real estate investment strategy and maximize your cash flow.

Here to talk with us about note-buying is investor and educator, Tyler Sheff. We’re very excited to have Tyler on the show. A seasoned real estate investor as well as a licensed residential Realtor, Tyler is also the creator and host of The Cash Flow Guys podcast.

This episode, Tyler will share his transition from house-flipper to syndicator. He also discusses buying notes as an alternative cash flow strategy. He shares tips for developing sustainable investment strategies and pitfalls to avoid along the way.

Buying Notes

• Buying non-performing notes can be a great strategy during a real estate market peak
• Debt sold at fraction of value

How to Invest?

• Joint Ventures: private money or IRA
• Financing through local banks

Anticipating Returns

• 12-24 months before first returns
• Investors receive preferred returns and 5 & 10 year pro formas

Avoiding Pitfalls

• When buying notes, due-diligence is very important
  • note documents mean a lot more than the property
  • watch for missing or incorrect information on notes

Investor Resources

• For more info on buying notes and debt investing, check out the Cash Flow Guys podcast. They’ve got several episodes on note-buying.
• To get in touch with Tyler or the Cash Flow Guys team, email info@cashflowguys.com or visit www.cashflowguys.com

The post Ep. 139 Tyler Sheff: Buying Notes Can Be a Sustainable Real Estate Investing Alternative! appeared first on Real Estate Investing in Florida.

Don’t miss a single show!

Normally, our episodes focus on making strong, equitable real estate investments but as investors feel the restraints of a tightening lending market, they are looking for alternative financing options. Mortgage notes represent a secure and a stable income market. Buying and selling mortgage papers can yield sizable returns that can supplement an investor’s income-base.

David Campbell is a jack-of-all-trades in real estate investing. He is an experienced real estate investor and developer, he handles property management, and he buys and sells mortgage notes and offers private financing options. David, who made the transition from high school band director to real estate investor in 2001, began buying and selling mortgage papers in 2012 and has manged an increasingly profitable debt portfolio since. This episode, David discusses his multi-transitional career in real estate and how buying mortgage notes can be a great way to invest in real estate.

• Market demands alternative financing options
• Private lenders + Seller financing
  • Self-Directed IRAs – about 60% of alt. lending market
  • Used for non tax-efficient assets like mortgage notes
• A significant mortgage/debt portfolio can be stable and lucrative income-base
  1. Happy to make $ on deal by end term?
  2. Deal still profitable w/ out loan payment?
  3. Predatory loan claims risks?
• Mortgage notes and Dodd-Frank
  • Work with Registered Loan Mortgage Originator – creates ‘Qualified Mortgage’ papers
  • Loan can be guaranteed against inconsistencies with Dodd-Frank regulations
• Ensure notes are good before buying
  • Borrowers – debt-to income ratio 45% or lower; no higher than 6.5% above average prime offer rate; 15 + 30 year terms (9.5% rates)

David’s website www.hasslefreecashflowinvesting.com is loaded with materials and resources for real estate investing, development and financing. Visitors can find out more about David’s enterprises as well as check out his blog for even more information! For other inquiries, David can be reached directly by email: david@hasslefreecashflowinvesting.com

The post Ep. 81 David Campbell: Buying Notes Can Be a Great Way to Invest in Real Estate appeared first on Real Estate Investing in Florida.