Trust Deed Investments

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Powerful Partials

Who the Players Are:

The first thing to remember when considering selling all or part of your note is to understand "who the players are." There are usually three individuals involved. 

  • The note seller, this is usually the seller of the property as well.   
  • The payors, obviously the property buyer.  
  • The investor, who agrees to buy the income stream from the seller,  

It's helpful to remember that unlike the seller and the property buyer, the investor has no “Emotional Involvement” in the property. That’s only the collateral to secure repayment of the debt in the event of a default. But it’s often expensive and time consuming to convert the collateral back into cash; that is all any investor or lender wants we don’t want the property…

we want the PAYMENTS


The Biggest Secret: "THE TIME VALUE OF MONEY".


What we and all note buyers do when we look at the value of a series of payments (also called an income stream); is to calculate the present value of the receipt of money in the future. We do this because dollars today will buy more than dollars in the future.


To simplify the Time Value of Money; imagine someone owes you $10 - They offer to give you $5.00 today or $25.00 one year from today…


Which one do you prefer?


Many would choose the $5.00 now vs.. $25.00 in a year…

That's the time value of money.

(If your answer is $25 one year from today; congratulations you don't need to sell your note).


Some of us can remember when gasoline was .31¢ a gallon? People were horrified when it shot above $1.00! Now, if we can get a gallon of gas for less than $3.00 we feel fortunate. Put another way, twenty years ago the value of a dollar was a good three gallons of gas. Today it is less than one. If someone had been buying the future value of gasoline then, he or she would have had to take into account changing values over time.


Selling Part of the Payments (Known as selling "A Partial")The Miracle of Compound Interest


Many Sellers, like you can understand and truley appreciate the miracle of compound interest and the time value of money. Most can see the big advantage in selling the most valuable part of the note (the next payments). While they continue to earn interest on the portion of the note you did not sell . Sometimes it's not only the best option;  sometimes it's the "only" option.


This simple purchase gives you the very best of both worlds. The powerful advantage to this purchase is due to the minimal effects of time; the discount is negligible and given enough time there is no discount! You want 100% for your note?


Keep reading...


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