You are a real estate investor. Your friend John wants your advice and guidance.
John says he is selling his home and moving out of state. His employer of 15 years has presented him a wonderful opportunity. He will be running a new operation, his compensation is doubling, and most important of all he will be living close to his wife’s family. She is thrilled, the kids are happy, and everyone loves their new home and neighborhood.
So what’s the problem?
John’s good friend and c0-worker Anthony wants to buy John’s home. Ok, great. No its not. Anthony asks John to carry the note. What? NO WAY! John considers himself to be financially conservative and risk averse. How in the world can he be living 1000 miles away and be totally dependent on someone else living in his house and sending him a check every month? Suppose Anthony loses or quits his job? Suppose he gets divorced? Suppose he gets disabled from a bad car accident?
Suppose, Suppose, Suppose! Fear, Fear, Fear!
You listen and tell John you understand because you get the same fear every time you get involved in a real estate transaction. So his fear is real. This is good news – not bad news. Fear can be healthy. The way to deal with the fear is to acquire knowledge. You advise John that one of the biggest mistakes you see in the real estate world is investors or sellers not getting to know their buyers or renters. So the more knowledge you acquire about the person you are intending to do business with, the better decision you can make. The knowledge whispers Yes or No and you decide accordingly. You explain to John that he has already – unknowingly – done the hardest part. He has qualified his buyer. He knows everything about Anthony – his work ethic, income, what employees think of him, his family, his integrity, personal habits, the car he drives – everything. This fear needs to subside.
John starts nodding his head. You now address the fear of being an absentee landlord. This is a legitimate fear, one I can personally attest to. What John sees is this: Anthony will be sending him checks for the next 20-30 years and there is no way he can comprehend agreeing to this. You calm him down by explaining there are professional note buyers in the real estate world who purchase for cash the kind of note John would be holding. And, the good news is that when the collateral is beautiful, the buyer strong, and the note terms attractive, they will be happy to buy this kind of note after one monthly payment has been made. John’s note qualifies on all counts. He won’t wait years.
So, he can sell his note and move on with his life. And, when he and Anthony visit, the time spent will be tension and stress fee. They can just be friends.
If you – or someone you know – needs guidance, a helping hand, counseling or just a price for a note, call me so I can help.
