Case Study (real case)

This example is with my old property I had for 15 years and sold it recently. The property with 4 units is located in Bakersfield, CA. I sold this property for $260,000.

Buyer purchased the property with 20% down and paid 2% in closing cost, so buyer invested $57,200. Buyer got a great loan for 5.5% rate for 30 years, the monthly payment is $1,180.

Let’s look at the figures, assuming no vacancies:

Rents $650×4$2,600
Property Taxes$350
Landlord policy insurance$150
Property Management company 10% of rents$260
Water bill$150
Trash$75
Gardener and cleaning$125
Mortgage payment$1,180
Repairs$200
Total Monthly Profit$110

What could happen if the buyer purchased a note for the same investment, $57,200?

Note$57,200
Interest Rate7%
Note Term360 months
Monthly payment$380.55

Let’s compare both investments

Income Property in BakersfieldProposed Note
Yearly Return on Investment (ROI)2.31%7.98%
Dealing with tenantsYesNo
Possible EvictionsYesNo
RepairsYesNo
InspectionsYesNo
Unplug toilets at 11:00 pmYesNEVER!!!!

What can you do?

If you are ready to invest in a note please contact us to get you a better investment than an income property. If you already own an investment property we offer a variety of solutions to convert it to your investment a better investment, ask us for our Seller Financing program.

The Note Agency Team

Please call us at 1-877-668-3790


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