| 1. They make sure that the insurance policy on the | | | | They are not childish in this area. They obtain the |
| property is issued for an amount that represents at | | | | services of an experienced foreclosure attorney to |
| least the full value of the note still owed to them. | | | | handle the problem instead of trying to save a few |
| 2. They also make sure that the note is recorded and | | | | bucks and "do it yourself". |
| they are listed as mortgagee, trustee, or the first | | | | 11. They realize that a note is a depreciating asset. |
| contract holder on the policy. This guarantees that they | | | | They understand that each month and each year the |
| will be entitled to any proceeds from any claim ahead | | | | value of their note becomes less and less due to |
| of the borrower. | | | | inflation. |
| 3. They make sure that they get a notice of | | | | 12. They understand the time value of money and are |
| cancellation if the borrower fails to keep a current | | | | able to answer these questions: |
| policy on the property. | | | | . How much is my note really worth in today's market? |
| 4. They make sure that real estate taxes are paid on | | | | . If I decide to sell today for all cash, how much would I |
| time by the borrower, and if necessary the note holder | | | | get? |
| will pay the taxes themselves. | | | | . Can I sell a partial of my note? |
| 5. They make it a habit to drive by the property on a | | | | . How fast can I get the money? |
| regular basis or have someone drive by to make sure | | | | . Who will buy it? |
| that their investment is still intact. | | | | . What is my risk factor in the long run? |
| 6. They keep all pertinent information on the buyer in a | | | | . What if things don't work out as planned? |
| safe place in case of fire, flood, earthquake, hurricane, | | | | . What is my exit strategy? |
| tornado or any other type of catastrophe. | | | | . Should I continue to receive monthly payments for the |
| 7. They make sure that they have received an | | | | duration of my note? |
| amortization schedule from their attorney or title | | | | These are considered some of the best reasons why |
| company so that they can keep up with all payments | | | | some people are successful note holders and some |
| that are made to them. | | | | are not. There are more, but these will make the |
| 8. They notify the borrower well in advance (at least | | | | greatest impact on you if you can emulate them. If |
| 3-6 months) before a balloon payment is due. This | | | | circumstances in your life indicate that now is the time |
| gives the borrower more than enough time to find | | | | to convert your note into cash, please give us a call |
| favorable financing; this reduces the threat of default. | | | | and let us help you. |
| 9. They don't allow the borrower to get comfortable | | | | Also, if you need to only raise a specific amount of |
| making late payments. They install a late payment | | | | capital, we can structure a partial so that you receive |
| clause in the contract and enforce it. | | | | exactly the amount you need without having to cash |
| 10. They are serious about their money and initiate | | | | out your entire note. |
| foreclosure proceedings at the first sign of trouble. | | | | |