Okay, time for part 2.  To recap, the scenario from Part 1 is as follows:  

This post was inspired by a customer who asked us for some help solving a problem.  We asked him if it was okay with him if we did a Money Blog post about a situation like his, and he said that would be fine.  So here goes!

This week we’ll continue with the scenario from Part 2.

To recap, I've bought a note for $20,000.  The terms of the note are as follows:

This week I’ll continue with the scenario from Part 1.

To recap, I've bought a note for $20,000.  The terms of the note are as follows: 360-month amortization (48 months have passed), 7% interest, $78,500 original balance, ($74,947.52 current balance), $522.26 monthly payment.

Investors Workshops is a great real estate education and networking group which has been running in Orange County for more than 10 years. On April 24th, Investors Workshops will be hosting a panel discussion with 5 successful Southern California landlords who manage all of their own property (30+ each). 

I had a discussion the other week with an investor colleague who had just bought a note at a discount.  That discussion got me thinking, and those thoughts became this week's Money Blog entry.  I've changed the numbers to protect the innocent.  =)

This part seems simple, but it's just the setup for a more intriguing set of questions to come.  Stay tuned!

Do you own a home or rental property and want to refinance the loan? We have historically low interest rates, so you should absolutely take advantage of them if you can! 

A lot of home loans out there amortize fully over 15, 20, or 30 years. That means that after that length of time, they're all paid off and the borrower doesn't owe anything more.

There are others, however, that amortize over the same schedule, but they're due in full after a certain period of time, say 5 years.

Over the last three weeks, we took a look at buying a fully amortizing note and doing various things with it to get a good return on my investment. This week, we'll do some analysis of a note with a balloon instead... and how much we'd be willing to purchase that balloon for.

This week we're going to see how much we can pay for a note to hit our yield target, and how to push that yield even higher!

This week we're going to figure out how we fare if the borrower on the note we own doesn't pay!