Valuation, Appraisal and Investing Tips for Real Estate Note Investing

Understanding Valuation and Appraisal of Real Estate Mortgage Notes

Savvy Investors Investigate Before Investing

As you manage your savings and investments, probably without realizing it, you are appraising and valuing investing opportunities, and their risks, and their future performance. You and millions of other amateur and professional investors are doing your own valuations; you are “swimming with the sharks.” Following are some basic appraisal and valuation tools that you should use to protect your savings from losses, and to improve your investment performance.

Shark Protection Tips For Investing in Real Estate Promissory Notes

Who is bringing you the deal? In many cases an investment opportunity is brought to you, and presented to you, by a stranger or by someone referred to you by an acquaintance. Your first job is to learn the investing facts about this person; learn exactly who he represents, how does he get paid, what is his professional background and training, does he have prior investing clients that you can interview as references for his capability.

If this person does not check out, don’t go any further with his investing opportunity.

What are the facts relating to the overall deal-the transaction?

Getting an overview understanding of the transaction, and then getting comfortable with its details is the first step needed to avoid having “lenders remorse”; that is, you don’t want to fund the loan now and then look back in three months and say to yourself “what was I thinking when I did it”!

In order to get that preliminary overview, get answers to these questions:

• What is the dollar amount of the loan?
• How long is the repayment term?
• What is the type and amount of the collateral security?
• Where is the transaction located?
• Where are the borrowers located?
• Why is the transaction happening?
• Do I understand the transaction?
• Am I comfortable with the thought of investing in this transaction?

What are the facts relating to the promissory note? Every promissory note is a custom made legal document. It is designed to accommodate and facilitate a specific business transaction. Be certain that you understand the transaction, and you are comfortable with the terms and conditions of the promissory note. Get answers to these questions:

• What is the interest rate?
• What is the length of the loan?
• What is the repayment schedule?
• Under what State’s laws will it be enforced?
• Does it comply with the laws of the State where it is to be enforced?
• Do I want to do business in that Sate?
• Do I have professional contacts (attorney, note broker, real estate broker) in that State?
• Is the note, and the collateral security document enforceable in court?

What are the facts relating to the collateral security? If you are buying or funding a promissory note secured by real estate learn:

Do I have a professionally done, current real estate appraisal report?
Do I have marketable, liquid collateral security?
Is the market value of the collateral security adequate to secure the note?
Is the borrower’s financial standing and creditworthiness adequate to do the repayment?
Do I have a Lender’s Title Insurance Policy?

Who will service the loan? Loan servicing services include collecting monthly payments, distributing payments to investors, mailing payment due notices to the borrower, maintaining adequate hazard insurance, keeping accurate books and records, and handling delinquencies and collection efforts.

Summing Up

You can swim with the sharks if you work with the right team. Work with experienced professionals-real estate brokers, loan brokers, attorneys and promissory note experts-who know the local market, its customs, and its laws. Don’t risk you savings by doing “on-the-job-training”.


“Advice is what we ask for when we already know the answer, but wish we didn’t.”

“Self-confidence is the first requisite to great undertakings.”

“Don’t follow any advice, no matter how good it seems, until you feel in your mind that it’s wise.”


Investing in Gold and Silver – Things You Should Know

When it comes to precious metals investing, there is a lot that you have to learn. You need to take the time to avoid the pitfalls of investing in gold and silver so that you can get the most from your investment every single time. While there are many different do’s and don’ts to explore, the most common mistakes are ones that you need to be aware of so that you can make the best decision for your investing needs.

First and foremost, you need to watch out for numismatic coins. These coins are rare and graded and can be highly expensive to purchase because they are graded. If you want to get the most from your precious metals investing, you really need to choose gold and silver investments that are low-risk and low-cost. The best way to buy gold and silver is to invest in bullion bars or coins. This simply means that the coins or bars are made of pure silver or gold and are created in mass quantities. These are made only for investments, which makes them a great value when you are looking for a good investment in precious metals.

Another tip to consider when investing in gold and silver is to make sure that you compare your options for dealers. There are so many different dealers out there to choose from and you really need to take the time to explore your options so that you can get the most for your money. If you buy from the first place that you find, you are most likely to get ripped off, which is not what you want to happen. You should also buy different denominations of coins and diversify your holdings to get the most from your investment. You should get an assortment from different mints and mining operations to make sure that you have plenty of variety. This is kind of like not putting all of your eggs in one basket.

Investing in gold and silver is a great, low-risk way to make money. So many people underestimate the power of the precious metals market, but you might be surprised to see how much you can make in terms of profits when you consider this type of investment. Feel free to explore your options and make sure that you are able to understand the process completely before you get started because knowledge is 90% of the battle with investing in gold and silver.For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!