Rental property landlord
At The Note Agency, we provide a whole gamut of Rental Property Landlord solutions, gear to deliver Rental Property Owners remedies and piece of mind.
There are certain unique challenges property owners could face when renting to a new tenant. These seem to be the common chief complaints most of the rental property owners refer to:
- Constant renters turnover.
- Rent payments always late!
- Legal trouble.
- Evictions, frequent visits to the court.
- Stress over property management responsibilities.
- Repairs, repairs, and more repairs
- City Inspections
And much more, If you have your property for a few years you will know what we mean!
What are your choices? How you can get the same returns without these problems and headaches?
our services
Full Real Estate service
The Note Agency has provided broker services that have been supported for over 25 years.
Have you considered selling your property outright? It just might be the perfect Landlords Solutions!
As a preferred vendor in the California marketplace, our vast experience in listing, marketing and negotiating (2 – 4 unit buildings and other multifamily dwellings) has earned us a 5-star ranking!
Over the years, we have developed our own solid and reliable portfolio of buyers of this type of property. As a result, we have an unmatched ability in creating sales opportunities extremely quickly, and with favorable terms.
Seller financing
The Note Agency has unparalleled experience in Seller Financing. So, this is by far our flagship product, as it is one of our most powerful financial tools!
Our knowledge in the structuring of Seller Financing transactions continues to deliver favorable results. For starters, you have the advantage of reducing taxable capital gains.
In addition, our building owners achieve premium valuations that are in most cases higher than if financed by standard institutional Lenders. As a result, typically buyers are more agreeable to accept a slightly higher price, vs trying to qualify with a traditional lender. This could be another of the Property Owners Remedies!
Mortgage Notes
We purchase and sell real estate notes in a variety of property categories for our investors, as well as for our own portfolio.
When you sell your building with Seller Financing, a Note is created to reflect the term, rate, etc. We pay strict attention to the necessary due diligence so that it is properly “Paper Up” for compliance purposes.
In addition, we adhere to Dodd-Frank, which refers to the borrower’s Ability to Repay, and other regulations.
This measure will ensure the note is recognized as a tradeable instrument in the open market. So, once the seasoning (6-to 12 months of collected payments) has occurred, the note will then be considered a “Performing Note”.
our expertise
Professional Due Diligence
Whether we buy, sell, or simply help to create a Seller Finance Note, we use nationally accredited third party companies. They range from Escrow, Title, Appraisal, to Specialized Real Estate Attorneys etc. These servicing companies not only ensure transparency but also make certain assets as well as borrowers are properly vetted. In the acquisition and disposition of properties, we rely on multiple listing services in an effort to expand our reach to larger broker audiences. We also utilize escrow/title companies that are versed in settling and closing 2 to 4 unit building transactions.
Property Analysis
Research, visual inspections, Landlords Solutions and constant communications with landlords/owners and residents will lead us to establish proper, coherent valuations used in the decision making process for both ourselves and our clients. Fundamental analysis is followed and combined with 'gut feeling' experience developed thru more than 58 years of the combined experience of our team of senior investors.
Make sense Investment
We use a number of financial tools and measures/indicators like ITV's (investment-to- value), ITB's (investment-to-balance) and LTV's (Loan-to-value) among other elements when analyzing a Seller Finance Note. For the acquisition/disposition of properties, we use Cap Rates, Gross Rent Multipliers and price per Unit approaches to arrive at correct valuations. They are all geared to achieve and maximize IRR's (internal rates of returns) and long-term yields for our clients and our own portfolio of investments.
An Actual Case Study:
Our client recently found and invested in a 4 unit building located in Bakersfield, CA. The asking price for this property was $260,000. The buyer will purchase the property with 20% down and paid 2% in closing cost, so the buyer will invest $57,200 in total. 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 |
Instead, the investor purchased a note for the same investment, $57,200?
| Mortgage Note | $57,200 |
| Interest Rate | 7% |
| Note Term | 360 months |
| Monthly payment | $380.55 |
Let’s compare both investments
| Income Property in Bakersfield | Proposed Note | |
| Yearly Return on Investment (ROI) | 2.31% | 7.98% |
| Dealing with tenants | Yes | No |
| Possible Evictions | Yes | No |
| Repairs | Yes | No |
| Inspections | Yes | No |
| Unplug toilets at 11:00 pm | Yes | NEVER!!!! Landlords Solutions!!! |
Case Study #2
Owner of 4 units in Fresno, CA, and client of The Note Agency wanted to sell the property to retire. He purchased the building 5 years ago for $180,000. Total rent was $1,500 and now is $2,200. He wanted to sell for $295,000. Let’s find a Property Owner Remedy!
Option #1
| List the property with a Real Estate Agent and pay 6% commission | $17,700 |
| Escrow and Title insurance | $5,000 |
| County Transfer Tax fee | $325 |
| Buyer Concessions/ Buyer’s Closing Costs | $6,000 |
| Buyer request for Repairs Repairs | $3,500 |
| Termite Inspection/ Work Done | $1,500 |
| Total Expences | $34,025 |
| Purchase Price | $295,000 |
| Seller proceeds before Taxes | $260,975 |
Option #2
Seller Financing / Installment Sale 0% Commission | $0 |
| Escrow and Title insurance | $5,000 |
| County Transfer Tax fee | $325 |
| Buyer Concessions/ Buyer’s Closing Costs | $0 |
| Buyer request for Repairs Repairs | $0 |
| Termite Inspection/ Work Done | $0 |
| Total Expenses | $5,325 |
| Purchase Price | $295,000 |
| Seller proceeds before Taxes | $289,675 |
Option #1
Seller will pay capital gains.
Proceeds will sit in the bank at a 1% annual rate.
Bank will charge penalties for early withdraw.
In this case seller will receive $217.48 a month, $2,610 a year.
In 30 years your balance will be $78,300+ $260,975= $339,275
Option #2
Seller will pay a small fraction for capital gains.
Seller will receive 6.5% for 30 years.
The note can be sold at discount any time without penalties.
In this case seller will receive $1,826.68 a month, $21,920 a year.
In 30 years your balance will be $657,600
For more information and Questions
1-877-NOTES90
Important
Please note, this is neither an offer to sell any security or an offer to purchase any security. Nothing in this communication is intended as legal or specific financial or investment advice or intended to address the objectives or needs of specific individuals. If you require legal or specific financial or investment assistance please consult your own attorney, financial planner or trustee for legal or financial advice.