What is a Good ITV?

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!

Why Buy Title Insurance?

Does the seller really own the property?  Are there any liens?  Is there legal access?  Does anyone else have a claim or right to use? Does the buyer have outstanding judgments that might attach when they purchase the property?  These are just a few of the questions you will want answered with a title report when considering owner financing. Read more

Real Deal #148 – Seller Financing for IRA Investments!

Welcome to Real Deals!  It’s always easier to learn from real life so here we share information from actual owner financed transactions. It can be challenging to obtain non-recourse loans necessary to finance the purchase of real estate in an IRA, 401(k), or other type of self-directed retirement account.  Seller financing can be a viable alternative financing solution.

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Temporary Seller Financing

Who wants to wait for the monthly note payments to trickle in over the next 5, 15, or 30 years? It makes sense that more sellers would be willing to carry back owner financing for the buyer if they knew how to sell all or part of their note for cash shortly after closing. Read more