THE HIDDEN MARKET --- REAL ESTATE PAPER
ILM Enterprises http://www.cash4cashflows.com/ilmenterprises
The Hidden Market --- Real Estate Paper
Are you aware of just how large the paper market or the
seller-financed mortgage market truly is? One out of thirteen
homes sold in the U.S. has some kind of seller financing.
Further, this market continues to grow at the rate of over $4
billion a year.
Government and industry sources estimate that $335 billion in
private paper exists in our country right now! Of that total,
nearly $100 billion consists of private residential mortgages.
Just what is private paper or seller financing, anyway?
Generally speaking, private paper refers to the notes and
security instruments created by private parties.
Private parties are those individuals or investors who are
lending from personal assets rather than through large
institutional lenders.
Although the majority of private paper assets exist in the form
of mortgage notes generated when sellers carry back some or all
of their equity in the properties they sell, a great deal of
private paper is also created as a result of other types of
transactions. Attorneys, for example, have taken promissory
notes secured by real estate as payment for legal fees. Swimming
pool builders and home improvement contractors use the private
paper device to secure payment for their work. Real estate
brokers have taken private paper for their commissions. Bail
bondsmen often take private paper security for their bail funds.
Divorce and probate settlements frequently utilize private paper
to facilitate the equitable distribution of assets to the
affected parties.
Many folks believe that the growth in the mortgage industry and
the low interest rates our economy has enjoyed over the past few
years have wiped out the need or inclination for private paper.
This is not true. Since 1993, private residential paper assets
have grown from $75 billion to approximately $100 billion.
That's $4 billion per year in new private paper created over the
past six years.
NoteWorthy
The incredible growth in the private paper industry has
refashioned what was once a small market into a full-blown
financial sector in its own right.
What just a few short years ago was a "hidden market" has slowly
crept from darkness into light. Networking has become the
byword, as industry participants have learned to work closely
with one another. Modern technology has also played a
significant role, as communication between note professionals
has improved. Another key ingredient that is propelling the
growth of the note industry is liquidity!
No longer are note buyers playing strictly in their own
backyards. A farmer in Bigfield, Indiana dealing with his local
note broker can now sell his note to an investor living in Joe,
Montana. What's the significance of this? Simply put, the
movement of capital, which in turn lubricates the economy.
The average note holder is now holding a high-return, highly
securitized instrument, which he can keep or sell with relative
ease.
Selling A Partial
Did you know that a note holder can even sell just part of a
note and keep the rest? That's known as a partial purchase. This
device is fairly unique in the investment world. How many
investments allow you to sell a portion of your future revenue
for cash right now, while still receiving the other portion of
that revenue stream as income?
Investors now have a higher degree of confidence in purchasing
paper or playing the paper game. Further, they have an increased
opportunity to find enough deals to sustain their portfolios and
their investment objectives.
Conversely, sellers enjoy an increased bidding atmosphere that
will usually ensure they get the best price available.
The Growth
Private paper assets have grown at the rate of $4 billion per
year over the past six years! Where did that growth come from?
Your clients!
Chances are you are actively involved with, or at the least
somewhat aware of, your clients' financial affairs. Somewhere
along the line, you most likely have some input in your clients'
decision-making processes. Being aware of the private paper
marketplace, and having at least a basic understanding of how it
operates, opens up all kinds of possibilities for the creative
professional to provide solutions for his clients' problems.
The primary service you offer your clients is counseling or
advice. The more you know about the paper game, the better
counseling you can provide. The better counseling you provide,
the more your clients rely upon your judgment. As this reliance
grows, the expansion of your practice is a natural consequence.
Credibility fuels prosperity!
The Future
In the months ahead, I will provide you with an updated road map
of the paper game to guide you through this hidden market - and
demonstrate how you can increase your business by having this
knowledge and an understanding of real estate paper.
For More Information and to Sell Your Note(s) Now, visit --->
http://www.cash4cashflows.com/ilmenterprises