Welcome to the other side of the real estate business! Do more deals, maximize your current portfolio to its full potential, and decrease risk?all through mastering finance and leverage in this introduction to the note investing business. Whether it's through mortgages, student loans, or credit card debt, nearly all of us (especially real estate investors!) are in the note business. The trouble is, most people are on the other side of it: writing checks to note owners rather than cashing checks as note owners. This isn't another cookie-cutter "how to" book?instead, Dave Van Horn takes readers on a journey with him as he looks back over lessons learned across three decades of real estate investing, and the path that led him to his current success in the note industry. He teaches by example, illustrates with real-life stories, and gives a 30,000-foot view of the note space. Whether you're a wholesaler, rehabber, landlord, or even turnkey investor, reading this book will help you turn your focus to the ?other side? of real estate. No matter your level of experience in the real estate business, the strategies in this book can help you build sustainable wealth today and for years to come. Inside, you will learn how to:
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Dave Van Horn has served as president and CEO of PPR Note Co.-a holding company that manages several funds that buy, sell, and hold residential mortgages nationwide-since 2007. Dave's expertise is derived from more than 30 years of residential and commercial real estate experience as a licensed Realtor, a real estate investor, and a fundraiser. As the latter, Dave has raised more than $100M in both notes and commercial real estate. In addition to his investments and role as CEO, Dave's biggest passion is to teach others how to share, build, and preserve wealth. He authored Real Estate Note Investing, an introduction to the note investing business that helps investors enter the "other side" of the real estate business. Dave currently lives in Paoli, PA.
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TABLE OF CONTENTS
Introduction: The Accidental Note Investor
Twenty Units Free and Clear
My Financing Problem
The Power of Leveraging Connections & Knowledge
Invest in Debt
How I Built My Wealth by Being like the Bank
The Goal of This Book
Introduction Takeaways
Chapter 1: How Notes Really Work
The First Note
My First Note
Case Study: The Beef Band House
How the Bank Really Makes Its Money with Your Mortgage
Banks Don't Just Make Money on Mortgages
How to Be like the Bank
Chapter 1 Takeaways
Chapter 2: Financing Real Estate: The Best Notes Are Your First Notes
The Football Game of Life
My First Property
Buying Purposefully and Structuring the Best Note Possible
Residential vs. Commercial
Why Buying in Your Name Initially May Make More Sense
Owning vs. Renting
Chapter 2 Takeaways
Chapter 3: When Traditional Financing Dried Up Part I
Using Unsecured Notes to Purchase Properties
What It Takes to Own a Home
Buying Investments with Unsecured Debt
The Real Lesson
How I Bought My First House with a Credit Card
Chapter 3 Takeaways
Chapter 4: When Traditional Financing Dried Up Part II
Using Secured Notes to Purchase Properties
Using HELOCs to Build Wealth
The Risks of Lines of Credit
Chapter 4 Takeaways
Chapter 5: When Traditional Financing Dried Up Part III
Using Private and Hard Money
Private Money
Why Private Money Can Beat a Joint Venture
How to Protect Your Private Money Deal
How to Find Private Money
Self-Directed Accounts
Things to Consider as a Private Money Lender
Hard Money
How to Become a Hard Money Lender
Case Study: Taking a Banker to Lunch
Chapter 5 Takeaways
Chapter 6: Other Ways Notes and Creative Financing Can Fund or Create Deals
Highest and Best Use of Your Property
The Life Cycle of a Deal
Another Way to Use HELOCs
Lease Options
Chapter 6 Takeaways
Chapter 7: Taking Over a Note (and a Property) via Subject-To Investing
What Is Subject-To Real Estate?
Walking into a Note: The Advantages of Subject-To for the Buyer
Walking Away from a Note: Advantages for the Seller
The Pitfalls of Subject-To
The Due-on-Sale Clause
Insurance
Chapter 7 Takeaways
Chapter 8: Use Notes through Owner Financing
Multiple Offers
Seller Seconds
The Lease Option Returns
Advantages for Sellers Carrying a Second
Advantages for Buyers Purchasing with a Seller-Second
Selling on a Wraparound Mortgage
Leasebacks: An Alternative to Owner Financing
Chapter 8 Takeaways
Chapter 9: Using Notes for Commercial Real Estate
My First Commercial Building
Mobile Home Parks
Debt vs. Equity Financing for Commercial Real Estate Deals
Case Study: A Mobile Home Park in Western Michigan
Chapter 9 Takeaways
Chapter 10: Institutional Notes
Calm Before the Storm
The Perfect Storm
PPR Is Born
Chapter 10 Takeaways
Chapter 11: How Institutional Notes Work
Lifecycle of a Loan
Two Paths for a Note
How Notes Are Sold
Chapter 11 Takeaways
Chapter 12: Advantages of Investing in Institutional Notes
Owning a Performing Note Is Easier than Owning a House
Owning a Note Portfolio Is Easier than Owning a Property Portfolio
What You Can Do with a Note
How Note Investing Can Be Beneficial
Chapter 12 Takeaways
Chapter 13: Where to Find Notes
Note Buying Is All about Relationships
Sources for Notes
Chapter 13 Takeaways
Chapter 14: Due Diligence for Note Buyers
Vet the Seller
Performing Notes
Nonperforming Notes
Chapter 14 Takeaways
Chapter 15: Exit Strategies
Option 1: Exiting through the Property
Option 2: Exiting through the Borrower
Utilizing a Servicer
Chapter 15 Takeaways
Chapter 16: Recapitalization
Recapitalization Method No. 1: Selling the Note
Recapitalization Method No. 2: Flipping the Note
Recapitalization Method No. 3: Selling a Partial Note
Recapitalization Method No. 4: Collateral Assignment of Note and Mortgage
Borrowing Private Money Utilizing Collateral Assignments
Chapter 16 Takeaways
Chapter 17: Sources of Capital and Getting Started in Notes
College for a Fraction of the Cost
Free or Low-Cost Insurance
How to Get Started in the Note Business
What Kind of Investor Are You?
Fund Investing
Buying Notes
Chapter 17 Takeaways
Chapter 18: What I Would Do Differently To…