News

Sneak Peak Book Excerpt Why Seller Financing?

In this Stop Flipping News, we would like to share a "sneak peak" from our new book on seller financing. This book is filled with valuable information for both the passive "hands off" investor and the "do it yourself" investor interested in creating his/her own notes. For the "hands off" passive investor, it will provide you with a "nuts and bolts" view of how your investment is working and give you a better understanding of exactly how your returns are being generated. For the "do it yourself investor" it will provide you with the framework you need to begin creating your own notes. The...
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Great Questions Asked By A Potential Investor

In this issue of Stop Flipping News, we would like to share with you some very good questions asked by a potential investor. This client was asking all the right questions and we think it will be very helpful not only for future investors but also our current investors to read through this conversation. We hope you enjoy and gain value from this post. *Investor's questions are in bold and our answers follow. 1. Who owns the property? We own the property. No liens on them as we pay cash when we buy. When we sell the note you will...
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Mortgage

Why Notes?

Note Investments compared to other investments. The primary reason why most note investors advocate notes over other types of investments comes down to two words. Collateral and Returns. With note investments you are often earning much higher returns relative to other types of real estate and stock market investments. With note investments you are also secured by the collateral, which is the piece of property. This is a major positive for many investors and often the primary reason why they choose to invest in notes. The fact that there is a tangible asset backing the investment that you have control of is extremely appealing to...
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Mortgage Underwriting Managing Lender Risk

Understanding the process of mortgage underwriting is critical for any serious note investor. A thorough understanding of the basic concepts and process behind underwriting, will allow you as the investor, to feel safe and secure in your investments and obtain a more complete picture of how your investment operates. From the viewpoint of a mortgage loan originator (loan officer/account executive), mortgage underwriting is simply approving or rejecting a loan application; and of course the originator believes that every loan s/he takes is a great loan and therefore should be approved; which means that when a denial letter comes back from...
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Documents

Documents in a Carry Back Mortgage Sale

Over the last two decades there were periods during which real estate property owners found it difficult to sell their properties by utilizing traditional financing methods and were compelled to assume the role of lenders and provide financing themselves by way of the “carry-back” mortgage. On some occasions – if the property was free and clear (having no outstanding mortgage balance) and without any other liens or encumbrances – the seller carry-back could be in the form of a first mortgage, and on other occasions this type of financing would have to be placed in a secondary or junior position....
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Stock Market

Best Investment Mortgage Notes or Stock Market?

Among the most important factors to consider when investing is managing the risk, whether dollars are being spent in real estate, stocks, oil, or other commodity; and since investments are made with the expectation of earning a return on the money invested, managing risk is a skill the investor should possess or, if he/she hasn't yet acquired such a skill, refrain from spending large sums of money – especially on Wall Street stocks – until obtaining the appropriate skill level, or alternatively, find “safe,” or less risky investment vehicles. In his article, 'The Inherent Risks of Investing in the Stock...
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San Antonio

San Antonio Real Estate Ideal for Investors

The City of San Antonio can be seen as an ideal location for individuals specializing in real estate and mortgage note investments. This declaration can be made due to the stunning performance of the local economy over the past several years, driven by a wide range of amenities and resources offered by this city. The unique economic and cultural characteristics on display in the city has made San Antonio one of the fastest growing cities in the two decades from 1990 to 2010. It should be noted that there are niches of real estate professionals and investors, including the investors...
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Accounting

Compounding Interest

At Stop Flipping we advocate our investors to become fully educated on the nuts and bolts of their investments.  The deeper their understanding and the more familiar our investors are with these finance fundamentals, the more they feel in in control and comfortable with their investment. Lets discuss a concept that lies at the foundation of note investing, the effects of compound interest. At the core of financial analysis there is the simple truth that a dollar today is worth more than a dollar tomorrow. The farther off in the distance that "tomorrow" is, the fewer dollars it is worth....
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Money

Investing in Mortgage Notes Inside Your IRA

All too often we come across investors who are unaware of the interest earning power of their IRA dollars. Many of them are under the impression that they cannot touch the money inside of their IRA. When asked to invest, they often reply with “I would, but all of my money is tied up in my IRA.” This is a very common misunderstanding and a very tragic one for those potential investors who are not in the know. By using a tool called a Self-Directed IRA, you are able to use the money inside of the account to purchase mortgage...
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The Time Value of Money Mortgage Notes

Understanding the time value of money is a concept that you must wrap your head around in order to become a successful investor of mortgage notes. There are two reasons why your dollar will buy less tomorrow than it can buy today. The first is inflation.  Inflation is the culprit of the rise in prices of goods and services. Think of it this way, how much did you pay for a candy bar when you were six years old and how much do you have to pay for that same candy bar today? The second reason why your dollar is...
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