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After a ho-hum summer, Note Holders are definitely gearing up. They are looking for cash! The phone is ringing, questions are being asked, motivations are being shared. Activity is at its highest level all year. Note holders want to understand the process of selling their note. They want to know how much their note will bring in the open market. They are gauging their desire and need for cash against the price offered for their note. And, since note pricing is the highest it has been in years, folks are in a selling mode! And if they don't want to sell today, they want to learn more about this whole "note selling thing" so when they are ready, they will be comfortable in working with someone - hopefully me - to get their note sold. A fun time for us in this business!
As I have repeated countless times in this Newsletter, most seller carryback notes are created out of necessity. A seller wants to sell a property, a buyer wants to buy it, and the specific circumstances dictate that a bank loan is not forthcoming. What to do? The seller carries the paper - even if he/she does not want to. Remember, most sellers want to cash out when they sell a property - they don't want to receive monthly payments. A void is filled by those of us in the note business who help these sellers get the cash they need so they can leave the note behind and get on with their life.
If you are in this situation today, call to talk about your note circumstances, even if you are not sure you want to sell. That's okay. I am easy to talk to, and if not today, maybe you will be ready down the line. It's okay to learn stuff today in preparation for tomorrow.
California and Texas
What do these two states have in common? Well, in addition to being the largest states in the country, they also do way more seller carryback transactions than any other state. According to Advanced Seller Data Services, California closed about 11,000 transactions in 2013 - Texas closed almost 24,000( 1st position only). The overwhelming number of these notes are by folks creating only one - maybe two - notes in their lifetime. These are not people creating paper as part of their business activity. So, as I discussed in my August Newsletter when covering Dodd-Frank Rules and Seller Carry Back, most of you are easily in compliance.
And with note creation growing at about a 7.5% annual rate, note sellers should find ready buyers for years to come if they have well constructed notes.
"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws.".... Plato, Greek Philosopher.
When the Next Housing Bust Hits - Blame the Bankers!
This is a sobering article on how the financial industry passes the buck. Good reading regardless of your belief system. Check it out.
www.marketwatch.com/story/when-the-next-housing-bust-hits-blame-the-bankers-2014-09-04.
"He who has never learned to obey cannot be a good commander." .... Aristotle.
More Bad News for the Middle Class
A recent article in Real Estate Investor illustrated the plight of the middle class, with too much of its net worth held in one asset - their home. And, midst the long and agonizing housing recovery, the richest are getting richer .See:
bizcatalyst360.com/shrinking-wealth-the-slow-real-estate-recovery-is-hurting-all-but-the-richest
"When choosing between two evils, I always like to try the one I've never tried before.".... Mae West, Actress.
'62 Ferrari Sells for a Record $38 million
This past August, $400 million dollars was spent on classic cars at the annual Monterey Car Week in Monterey, California. A 250 GTO Ferrari - among the world's rarest and most coveted cars - garnered a record $38 million. The car was purchased way back in 1965 for $4000 by Fabrizio Violati, a wealthy Italian who raced the car extensively and held it for decades.
Just thought you might like to know what some wealthy people are doing with their cash!
"Experience is a hard teacher because she gives the test first, the lesson afterward.".... Vern Law, Pittsburgh Pirates Pitcher.
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