Ways to invest in real estate without inconvenience of tenants and property management
I was never in the note #business. I used to see that people are somehow in the note business. People are having car loans, student loans, credit cards, mortgages, medical loans etc. In fact, many of us are involved in note business. The only difference is that they are just writing checks to banks instead of receiving. That is the answer how I got into note business and why I do note business.
As for as my case is concerned it was just an accident that got into note business. It became a significant part of my investing career.
At the beginning, I was just a real estate agent having expertise and proficiency in fixing all property matters. I have a belief that hard work, determination and investing in physical real estate are the keys to become a rich person. All cash flow is not created equal that was out of my box at that time.
I have discovered some on my own regarding owning money and #property #management. The shortage of options were always there as I was eager to expand my personal portfolio of buy and hold properties. The options were getting down with residential loans. There were tough and hard terms with commercial loans. More fees, tight margins and high rates due to low cash flow. At that time, I had to become more attentive and creative with things like personal financing, lease options. At that point I had discovered new ideas, tactics and strategies just like owner financing, and carrying a second mortgage as the seller.
It was just like I have turned the stone and got to know that I could lend out money from my IRA and from HELOCs (Home Equity Lines of Credit) that I had on all my apartments and SFRs (Single-Family Residential Property). the capitulates were quite good 15% to 18%, one-year interest only and I had the options and ways to put my money to work. It was too transparent to me that how easy this type of cash flow to earn because my portfolio of short term rehab loans grew. I was dealt in with 40 units of my own and approximately 100 units as RE/MAX agent.
Property management was very time consuming. I had to went through different paces to deal with different kind of things like tenants, inspectors, repairs, contractors and eviction formalities.
Thankfully I rarely faced legal situations like court and dealt with inspectors, contractors, repairs or townships.
I rapidly jumped to conclusion that the other form of cash flow backed by san jose ca rEAl estate without tenants was quite great. Over the fifteen years I was in managing the properties with an outmoded way. Even, I had ran into commercial properties just like mobile parks, storage centers and commercial offices to get away from the typical tenants. At the end I came to know nothing could be easier than note investing.
Advantages of note investing.
You would find several advantages of note investing as compare to cash flow. let me tell you one by one, you may begin with deploying a small amount of capital.
Let me give you an example: some P2P lending companies allow you to buy some partial or portion of notes for only 25$.
Second advantage would be you can possess the benefits from the increased liquidity. Notes can be sold or recapitalized very easily and rapidly. Collateral Assignment of Note and Mortgage or partial selling options are available all the time.
Like real estate, you don’t have depreciation deductions. It is much easier and convenient way to earn income, tax wise, since it is still considered passive. So, if you own partial equity notes and more equity comes back, ultimately your note becomes more valuable. This is the true picture of owning notes that would be able to change the way to increase cash flow.