Structure for Yield

With Proper Note Yield Buyers will Line Up

Yield Structure


High Yield Structure Guarantees Best Price

Buyers Will Line Up to Purchase Good Yield

yield structureThe key to proper yield structure is the time value of money.  If you could have $100 today or $100 a year from now, which would you prefer?

I am sure you would agree…

$100 today is much more valuable than $100 in a year from now.  Obviously an astute person can take $100 today and turn it into $150 or more in a years time.

In todays world…

with zero and negative interest rates, investors are scrambling to find yield.  Junk corporate bonds for the last few years have been paying one of the highest rates obtainable for the ordinary investor.  Unfortunately with declining revenues and earnings these types of investments are becoming more and more dangerous.

Collateralized real estate notes…

are some of the best investments available if they are structured correctly with proper yield.  If a note payer defaults on his payment schedule the owner of the note can take over the real estate.  I have always tried to explain to real estate investors the best way to buy real estate is to buy the note or 1st position mortgage instead.  By doing this you are in fact buying the real estate for pennies on the dollar if the payer defaults.

Additional considerations to inhance good yield structure…

when selling your home with owner financing to reduce the probability of buyer default and insure the marketability of the financing:

  • Get a large down payment (the more the better)
  • Utilize a Contract for Deed as opposed to a Deed of Trust
  • If you are considering selling the financing inform your buyer of the ultimate purchaser of the financing
  • Shorter terms and higher interest rates translate into higher yield
  • Balloon payments 5 or 10 years out also improve the yield and marketability of the note
  • Finally our company buys notes and will be happy to give you a quote

As always…

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