Dawn Rickabaugh - Note Queen

Increasingly, sellers are becoming more flexible and carrying paper (taking back a note) in order to close escrow on their investment properties. So, how does that work in the context of a 1031 exchange? Can it still be done?

To answer this, I'll need to introduce you to a very smart guy, Bill Exeter, who owns and operates Exeter 1031 Exchange Services. I was down at his office in San Diego yesterday so we could visit on his internet talk radio show. (To hear the transcript, you'd have to click on "Listen to Prior Recorded Shows" for April 7, 2008).

Between his website and his radio show archives, there is nothing you can't find related to the 1031 exchange, and he actually taught me a lot about how real estate notes figure into the 1031 equation.

Sellers who have created a seller carry back note on their down-leg property (which is a good technique for getting top dollar and a quick close), have several options when moving into their up-leg property:

(1) Ask the seller to take an assignment of the note as part of the offer. Usually sellers are not too excited about this option.

(2) The up-leg buyer (note holder) could contribute cash into their own 1031 exchange (boot paid) in order to complete the 1031 exchange. Then they would get the note assigned back to them AFTER the 1031 exchange has been completed (boot received). The boot items net to zero so there is no tax issue.

(3) Sell the note for cash, which is then credited to the up-leg seller to complete the exchange. It's important to remember to have the exchange company listed as the beneficiary on the note. It would also be a good idea to consult with a note professional before you create the note so you know you can sell it for minimum discount.

I'm actively buying real estate notes, and I'd love the chance to buy your note, (or a note your client may be holding). With the uncertainties in the market, many people would rather get all of their cash now than wait nervously for each monthly payment to come in, hoping they won't end up having to foreclose.

A quick email or phone call with the basic terms of the note will help me give you a ballpark figure for what I might be able to pay for your note. The discount required depends on many different factors.

YOU ultimately determined the value and marketability of your note when you created it. That’s why it’s so important to consult with a note professional BEFORE you close the deal! Sellers who carry back paper (and even some of the professionals who advise them) do not understand the secondary trust deed market. If there are lethal weaknesses in your note, or your transaction, then you probably won’t have the option of selling your note at all. Just hang on and hope the buyer keeps making those payments!

Remember that you don’t have to sell the whole note. If you only need $25,000, chances are you only have to sell a few payments, and you’ll take a smaller discount overall.

If you are collecting payments on a note secured by real estate, and you would like to order a Professional Note Appraisal, I’ll need a little information:

• Copy of the note
• Copy of the deed of trust
• Credit score of the Payor (if known)
• Payment history (do they pay on time every month?)
• Copy of the escrow instructions
• Copy of the escrow closing statement
• Recent appraisal (if available)

Thinking about creating a note? If you are a property owner or a real estate agent, and you wonder if seller financing is even a potential option for you or your client, please email me at dawn@notequeen.com. I’ll respond via email, or set up a time that I can meet with you by phone if you prefer. This short consultation format is entirely free of charge.

If we make it past first base, here are your options:

• One-time consultation: $99

• Comprehensive consultation: $249
  

• Professional Note Appraisal: $199

• If you live in Los Angeles County, click here for a menu of services

For an explanation of these options, click here.

If you’re interested in learning more about how the market decides the value of a note, keep reading!

How to Turn Your Best Investment into an

Even Better One!

DOES ANY OF THIS SOUND FAMILIAR?

“I would sell my property, but I can’t because . . .”

• “I refuse to pay all those capital gains . . . and I don’t want to exchange into another property because I’m tired of managing property and dealing with tenants.”

• “I need the income . . . this is my retirement!”

• “I like my tenants and I would worry about them if I sold the property.”

• “I’ve got tenants/family members that don’t pay me enough, but I just don’t have the heart to raise their rent or kick them out.”

• “I want to give my children a good inheritance. I’m leaving the rental properties to them . . . we already have a trust set up.”

If you hear yourself in any of the above, keep reading. This guide will expand your understanding, and give you more options than you may have previously thought possible.

Hi, I’m Dawn Rickabaugh, the Note Queen. Every day I talk to people who are excited when I introduce them to the concept of Seller Financing (also called Seller Take Back or Seller Carryback Financing). They like what they hear on the phone, but they want more, something they can hold in their hands and study with family members, accountants and attorneys.

The concept is a simple one, but surprisingly, few people really understand Seller Financing. I’ve put this Special Report together to meet the educational demand for this information. I hope you find it to be of value, now and in the future. The material is meant to serve as an introduction only. There is always more to expand upon, so if you have any questions, please contact me personally. I can be contacted by phone (626.641.3931) or email (dawn@notequeen.com).

Many people have wisely invested in real estate over the years to achieve their financial objectives. Acquiring income producing property is one of the best ways to create wealth.

However, at some point, many people tire of managing their properties. They are tired of dealing with tenants and the necessary repairs. Perhaps health problems are forcing them to slow down. They want smart, safe investments that are less management intensive so they can relax, travel, and enjoy life.

With Seller Financing, you can DO LESS and GET MORE, turning your best investment into an even better one. Seller Financing can turn real estate into a paper asset secured by real property. Structured properly, this is one of the safest, most coveted investments in the market today.

Read the rest...

3 MAGIC WORDS: "OWNER WILL CARRY"

Whether you own your property free and clear, or you owe more than your property is worth, I am dedicated to showing you, the "Fiz-Bo" (For Sale By Owner), how to have the "Bo-Fiz" (Best Opportunity For Success) in today's market.

If you're a FSBO, then for your BOFS you'd BOSF because you'll SFOB.

Translation: If you're a

• For Sale By Owner, then for your
• Best Opportunity For Success you'd
• Better Offer Seller Financing because you'll
• Sell Fast Offering Banking.

So you need or want to sell, and you want to sell without an agent because:

1. You'd like to keep the change in your own pocket, thank you, or maybe...
2. You're a licensed real estate agent or a seasoned investor who doesn't need any help navigating the territory, or maybe...
3. You just plain hate real estate agents, or maybe...
4. You think you can't afford one because you're practically upside-down and worried that you won't even be able to sell it for what you owe, let alone pay a commission, and darn it, you just want out from under this thing! If this describes you, the good news is that the bank will pay the closing costs, and you can afford a real estate professional certified in short sales to help you.

Regardless of which category you fall into, chances are you want to:

>Get your price regardless of market conditions

>Close quickly

>Have more buyers looking at your property

>Have a competitive edge over the 12 other listings on your block

>Defer any capital gains that may apply

>Maybe monthly cash flow would be nice, with the option to

>Get a lump sum of cash at any time . . .

Do I have your attention? OK, let's talk.

It's no secret that the housing market is in a recessionary mode, and that there is a global liquidity crisis. Individuals and corporations can't get loans. Nationally, there will soon be at least a 12-month supply of houses. This means that the average home, without substantial price reductions, will take a year to sell.

Let's face it, many buyers are holding back. There is downward pressure on prices, and willing buyers are having a hard time getting financing. That means that when you are trying to sell your property, you are competing with many other sellers for precious few willing and able buyers. How can you give yourself the competitive edge?

Sellers can substantially compensate for whatever is, or is not, happening in "the market" today and create their own liquidity, their own market. Most banks, mortgage brokers and some real estate professionals don't want you to know this:

Sellers can get top dollar by offering terms

I'd like to teach you some yoga, some fiscal yoga. I'm excited to introduce you to ideas that can increase your economic power through financial flexibility. With a little guidance, there are monetary postures you can hold that you probably never dreamed possible. Learn to meet your financial objectives regardless of market conditions.

Many people are deciding not to sell, thinking the timing is just not good. You, as a FSBO, are obviously trying to sell because you really need or want to, but the offers aren't exactly streaming in, and you're wondering if you should take it off the market or reduce the price considerably.

What if there was another option to explore?

If you will advertise your property using these 3 Magic Words: "OWNER WILL CARRY" you will instantly increase your chances of putting a very nice transaction together.

So, what exactly does that mean? Carry what? Carry the financing--become the bank on your own property. (Read more about this). Instead of the owner, you become the beneficiary. You receive the monthly payments made by the buyer. By offering terms, you will instantly increase the potential number of buyers for your property. There are great buyers out there with cash and decent credit that just can't get a loan right now.

Here's an example to give you a real life success story:

One of the things I love about Pasadena is the intelligence, creativity and fun-loving nature of the trees. These palm trees behind Pasadena's Gold Shell in Memorial Park are doing a good job of making shadow shapes that definitely look like . . . well, trees. No, wait, I see it now! There's both a front and a side view of a tribal headdress . . . or maybe a couple of turkeys or slightly battered peacocks.

The metro's gold line has a station here at Memorial Park, which is very convenient for my daughter, who gets off at this station to get to her down town cheer practice. (Victory Cheer Company)

"The Levitt Pavilion for the Performing Arts in Memorial Park sits in the hub of Pasadena, truly in the center of the City of Pasadena’s diverse neighborhoods and cultures.

Once the home of the Pasadena Public Library, Memorial Park was one of the first two properties purchased by the City for public open space. The 6-acre property was sold to the City of Pasadena for the public library, which opened in 1890.

With the relocation of the Library to its current home on Walnut, Library Park was renamed Memorial Park in 1927. One of the acclaimed park activities during that time was the Sunday afternoon concert series. As attendance for the concerts grew, the Gold Shell was built in 1930.

In 2003, the City of Pasadena approved a partnership with The Friends of the Levitt Pavilion, which included a donation from the Mortimer Levitt Foundation of $250,000 to refurbish the Gold Shell and $500,000 over a 5-year period for performances at the newly refurbished venue. In the summer of 2003, The Friends of the Levitt Pavilion-Pasadena produced its first summer concert series, under the stars, in the beautifully restored Memorial Park, for a return to strolling through gardens, picnicking, and listening to music."

My favorite event at the shell was when Puccini visited last Fall. I had always wanted to hear him live, and the performance was amazing. They must have forgotten to send out the email flyers beforehand, though, because the crowd was rather small.

This can work to your advantage, however. There's nothing more intimate than a private concert by your favorite Italian opera singer. Tell me, what other city offers you this? Buy in Pasadena if you have any culture at all.