How To Have A Good Exit Strategy When Buying Real Estate Notes

If you are going to be a TRUE real estate investor, it is vital to have a good exit strategy when you are buying real estate notes. As with any real estate investment, you make your money going in. Being successful when you are buying notes depends on you having the ability to create a dashboard report (looking forward) based on the 5 wealth building principles as they apply to investing in notes.

Exit Strategy When Buying Real Estate Notes

  1. Income: What return of income will you get on this investment? Do you know that you can purchase individual notes that are performing beautifully with no advance work or diligence needed on your part to structure. Note buyers who are purposeful purchase a structured note that is set up with a predetermined return, where you get a set interest rate in the value of the note.
  2. Deductions: O.K. this is the one wealth building principle that I have been unable to find any note that will accomplish what we are aiming for. Notes is a passive investment with no deduction capability, unless of course you lose all your money and those are not the type of deductions we want!
  3. Equity: Will your note purchase create equity day one and into the future? This is most likely what your objective for purchasing notes is in the first place. DO YOU KNOW whether your note purchase will accomplish this and at what value is this equity. Again, there are note purchases that will do this.
  4. Appreciation: Only some note purchases have this exit strategy ability and probably rare, but very doable with the right purchase and can be incredibly lucrative.
  5. Leverage: This can be accomplished by the savvy investor. No one can directly finance the purchase of notes. Indirectly however, with Helocs and IRA funds, you can leverage your money and create this valuable 5th wealth building principle.

Most purposeful, least risk note purchase around

Purchasing a note at a 30 to 50 percent discount off of the value of the property with a fixed interest rate of return gets you both income and equity. Use Heloc or IRA money to purchase the note with a predetermined sale date of the property and share a 50/50 Equity Appreciation position and get appreciation and leverage.

To learn more about buying real estate notes and where to find them, give us a call at 941-718-7761 and check us out on the web at www.equitybuilders group.com