While listening in on a podcast the other day, hosted by Brecht Palombo, founder of distressedpro.com some of the data points presented during the podcast were quite interesting and worth sharing.
- At the height of the mortgage boom, 14% of property financings were still owner financed, despite easy credit conditions in the marketplace.
- Today, approximately 26% of property transactions involve owner financing, which seems reasonable in context of the tight credit environment we currently face.
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Give or take a percent, these numbers imply a lot of private notes have been and will continue to be structured & created by property owners as a means to get their real estate transaction done. On the other side of the coin, there are many private note investors who are actively searching for more competitive yields in today’s low interest rate environment. The two should meet.
Brecht’s guest speaker was Troy Fullwood, founder of Pinnacle Investments and a 10 year veteran in note acquisition. Relaxed, casual and informative, Troy spoke about getting started in the note business using plenty of real life examples and cases. Troy also generously shared his strategy for sourcing owner financed notes using specific examples and novel ideas on how to reach note owners. Finally, the podcast covered what Pinnacle was seeing in terms of rate, term and credit quality in the private market. A good read/listen that can be found at www.distressedpro.com/blog/podcast-how-to-get-started-in-the-note-business/
A most notable quote from the podcast was “One of the reasons I wanted to do this call with you today Brecht, was to, how do you say, for lack of a better word stir the pot up a little bit. Those people who are thinking outside the box are going to be able to capitalize on today’s marketplace.”
That’s a great approach. Notes are being created in owner-financed real estate transactions in ever increasing numbers and will be with us a while. If you are a real estate agent, mortgage or finance adviser here’s another area of opportunity for you to team up with quality private money lenders advisers who represent local demand for competitive yielding real property notes. Notes aren’t exclusively the domain of the “big guys”.
Brecht Palombo, founder of www.distressedpro.com a data services site that real estate, investment and banking professional use to find bank contacts and evaluate the REO and non-performing loan information for US banks.
Troy Fullwood, founder of Pinnacle Investments, a property investment company focused on the acquisition of residential and commercial whole loan assets and owner financed real estate notes. Since 1997 Pinnacle has been involved in over 12,000 secondary mortgage transactions throughout the United States and Troy is a frequent speaker at industry events and conferences.