Buying real estate notes from banks can be a great investment activity. These notes are legally binding documents offered by a lender to a buyer of property, they spell out the terms and conditions wherein the buyer repays the capital. The actual payment amount, interest rate, and due date would all be indicated clearly in the real estate note document. Today, this type of investment transaction has become common place, banks often trade in these notes as part of their regular business practices.Whatever the reason for wanting to buy a real estate note, it is important to carry out an adequate amount of research at the initial stage. Just as the diversity of properties in the country is vast, so are the types of real estate notes. Apart from purchasing the documents from banks, there is also the option of doing so from private lenders as well as brokers. Be aware that when purchasing a note, you will also take control of all the terms that are attached to it.You can use a search engine to quickly identify a list of establishments that sell these investment documents, it would be useful to make a list of at least half a dozen institutions who you should then contact directly. When speaking with the sellers, find out why they are willing to sell on the note, perhaps they intend making some profit or maybe they are concerned that the value of the property is actually lower than what was initially believed.Before you proceed with the transaction, request the bank to have at the ready all documents pertaining to the creation of the original note. You should also ensure that the loan balance is verified, along with other details such as the term of the loan payments.Only move forward after reading the documents carefully to make sure that everything is fully in order. If you discover after putting your signature to the deal that there are variables that you were unaware of you may end up losing money.As property prices can go down as well as up, the net worth of real estate notes can also vary year on year. Always carry out ample research into the current property market if you are to invest in this industry. If the property on the note was valuated in times of boom, today its market price may not be so great. There is always the option of getting a professional appraiser to check out the property so as you get a clearer picture.Prior to signing a contract, try to negotiate the terms, you should get an attorney specialized in real estate to draw up an agreement which would need to be signed by yourself and the other party. Once the transaction has taken place, you should record the sale at the county clerk’s office in the area where the property is actually located, as opposed to in your home county.Buying mortgage notes from a bank can be a great investment, though this is only the case if ample research is carried out. Never rush into making a purchase of any note, no matter how profitable it may seem at the initial stage.
If you’re looking to buy real estate for the taxes, avoid the tax sale auction. There are too many other bidders, you can’t inspect properties first, and owners often pay off the taxes anyway. Here’s how to buy real estate for the taxes without bidding at a tax sale.1. Buy directly from the owners – but only after the tax sale. If you want to buy real estate for the taxes and not much more, this is going to be the only way you can accomplish that. You will pay much more than the taxes at tax sale, so approaching the owners is the only shot you have at getting property for next to nothing.2. See who still hasn’t redeemed their property a few months before the end of the redemption period. If they haven’t by then, they probably can’t. This also has weeded out properties with mortgages, who have been bailed out by mortgage companies now.3. Call the owners and see what’s happening. Most will be happy to tell you – they’re either trying to figure out what to do, or have just simply decided to let the property go.4. If they want to sell, offer them $200 for their deed. Then you can work out a percentage they can get later, after you sell the property. This will likely be their best option, since other investors are long gone by now.5. If they’re letting the property go, ask them to sign over their deed. Tell them you want to see what you can do with it, if anything. Offer them $200 for their time.6. Take care of the tax issue. If you can and want to, pay the taxes and keep the property or sell for retail. If you can’t, simply flip it quickly to another investor for a steep discount and let him deal with the back taxes. In this scenario, you’re actually buying the property for less than the taxes!This is by far the best way to get properties for very little cash, and clearly offers the best return on your money. Whether you’re new to tax investing or a seasoned investor, this technique will make you a ton of cash. With the huge foreclosure rate, it’s an amazing time to start grabbing tax deeds – and there’s a huge inventory out there for you to choose from right now.