Real Deal #151 – Residual Income With Notes!
Welcome to Real Deals! It’s always easier to learn from real life so here we share information from actual owner financed transactions.
Looking for residual income with notes? Does a future income stream of $1,000 per month for 10 years on just one deal sound too good to be true? Discover how the Buy Full Sell Short strategy works on this Real Deal! Read more
What is a Good ITV?
February 5, 2009 by Fred Rewey · Leave a Comment
Sellers and investors often ask what ITV (Investment to Value) they should target when buying or selling a private real estate note.
You may have seen that some note investors claim they will go 85, 90, even 95 percent ITV. Frankly, I have yet to really meet them when it comes down to funding a deal in the current market.
As a refresher, the ITV represents how much is invested or paid for the note in comparison to the property value. It is a different ratio then the buyer’s LTV (Loan to Value) or the discount percentage.
The lower an ITV the safer the investment, but you still want to stay competitive. Personally, I don’t like much over 80% ITV and prefer to be around 70% or lower depending on credit. You want some room in the event of a foreclosure or a down market (either of those sound familiar around now?).
A word of caution; don’t let a higher return push you above your ITV comfort zone. If you decide you want a 75% ITV and 10% yield then don’t be tempted with an 85% ITV and 13% yield. Someone once told me yield is irrelevant if you don’t get paid – they were right.
For more information on buying or selling notes for profit please visit the bookstore for Personal Profit Series: Notes – Your Complete Money Making System to Buying, Referring, Creating and Holding Real Estate Notes!
Is 2009 a Good Time to Buy Owner Financed Real Estate Notes?
February 3, 2009 by Fred Rewey · Leave a Comment
This question is on the minds of many investors right now. With real estate values down and banks restricting credit, there are more seller-financed notes available. Although there is never a crystal ball, if you buy notes at a good ITV you have the opportunity for high yielding investments. Here are a couple things to look for… Read more
