Buying a bill of exchange for real estate is like buying a boat

When you get down to business right away, buying a broken real estate bill is like buying a boat; the happiest two days are the day you buy it and the day you sell it! Investing in non-performing bonds (NPN-NPL) and cashing in for profit are my two happiest days as a bond investor.

You’ve heard the old saying in real estate: Profits are made when you buy. How true, especially in the music world! We have found that you should consider all the costs you will face from the day of purchase to the day of sale, and use this to make sure you are not overpaying. Otherwise, you may lose money; sometimes a lot, sometimes all.

Although there are some warm and fuzzy feelings when you own a boat, like when you first take it on the water, you will have a lot of fixed costs. If you store it in water, there will be docking fees, maintenance fees, insurance and, if you funded it, monthly payments. If you store it at home or in a parking lot, you will have to protect it from the elements, possibly pay rent, and you could destroy it in an accident by towing it or throwing it into the water.

With NPN, finally making contact with a homeowner who wants to stay despite trying their best to be invisible is equally exciting. This usually results in either trying to come up with a payment plan to get them to pay back the debt, or a lump sum – a great feeling.

Otherwise, it is practically death from a thousand cuts.

Sometimes it seems to me that we are doomed and frozen to death by a multitude of service providers; lawyers, sheet music specialists, document keepers, rehabilitologists, lawn mowers, property preservation specialists, appraisers, photographers, home cleaners, city agencies, code compliance, county tax collectors, realtors, medical inspectors, zoning ordinances, homeowner associations, utilities , forestry divisions, garbage trucks, floodplains, etc. that want to get as much money out of you as possible every time they move or print something.

So the most important thing I do now is come up with as many costs as possible before we make an offer to buy a note so that we can factor that into our purchase price. One of the most important things we found in developing over fifty notes is that costs are usually higher and it takes longer to get out in foreclosure states. And now that we know a thing or two about rebuilding real estate, we have equated the potential home renovation costs with our bills of exchange bids so we know if we may still be making a profit or taking a potential loss.

It’s time to heed the old phrase of the carpenter; Measure twice, cut once. As for the notes, you want to make sure you have traced the numbers inside and out before you purchase the note with “Count twice, buy right.”

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