Jan282010
Half Of Home Sales In U.S. Done With Cash Flow Notes?
Want to know the future of the Cash Flow Business? Look at the past.
I just stumbled across an amazing article in the real estate section of the New York Times.
The article I found is actually 28 years old… and that’s what makes it so incredible. Because by looking at the past we can actually study this information and make some predictions about what the future will bring.
So let’s travel back to 1982.
Ronald Reagan was in office. The 49er’s won the Super Bowl. M.A.S.H. was the top show on T.V. And bank interest rates were…
Sky High!
As a result, many would-be home buyers were balking at the idea of signing up for a mortgage with an 18% (or higher) interest rate. And with home buyers sitting on the sidelines waiting for interest rates to come back down, home SELLERS were stuck.
That’s why many home sellers started offering seller-financing (which is just another word for cash flow notes.)
In fact, in 1982 the National Association of Realtors estimated that nearly 50% of all home sales involved some form of seller-financing. Can you imagine how many new cash flow notes were created in 1982!
Today, You’ve Got A Similar Opportunity
Right now, in 2010, we’re facing similar circumstances. Of course, interest rates on mortgages are much, much lower. But qualifying for a bank mortgage has become extremely difficult – so the result is the same if not even worse.
Which means many would-be home buyers can’t get bank mortgages, even if they’ve got good jobs and good credit. Now, if you wanted to buy a home but the bank wouldn’t give you a loan… what could you do?
Well, you could do what people did in 1982… and ask the home-seller to offer you seller-financing. And that’s exactly what I suspect many home-buyers will do in 2010, which could cause another explosion in cash flow notes.
I mean, look at it this way:
In 1982, home-buyers couldn’t get bank mortgages because of high interest rates. So many buyers asked the sellers to “carry-back financing” (fancy term for “create a cash flow note”). And as result, there was an EXPLOSION in cash flow notes.
Today, in 2010, many home-buyers can’t get mortgages because of tighter lending requirements. So I think many buyers will ask the sellers to “carry back financing.”
As a result, the number of cash flow notes created will…?
What do you think will happen?
Leave your thoughts in the comments.
Oh and one more thing:
Edmund Burke famously said, “Those who don’t know their history will be forced to repeat it.”
While this quote is often tossed out to kids in high-school history classes, we don’t really appreciate this quote until a situation like this is staring us in the face. I believe we’ll see a “repeat” of 1982 this year, in 2010.
That’s why everyone here at Dalbey Education is working overtime to prepare our students for what I think will be one of the best times in history for note-finders.
If you don’t have my best selling course, Winning In The Cash Flow Business, now is the time to get started. You can get it here.
– Russ
Founder of Winning in the Cash Flow Business
Dalbey Education
So True! This Adage Also Goes With, How Can One Go Forward If One Does Not Remember From Where One Travelled From? You Always Need A Plan, A Worksheet, A Solid Game Plan To Move Toward The Future!
January 30th, 2010 at 1:37 am (#)
Well, I truly believe that the number of cash flow notes that we see in 2010 will skyrocket. I think family and friends are going to be helping each other out here, as well, since times are so hard right now for a lot of folks.
February 12th, 2010 at 6:24 pm (#)
Fear is whats holding me back ,but I need to take a step because my bills is piling up.
February 15th, 2010 at 3:00 pm (#)
I Agree with all the comments above. I also was constantly told that scared money doesn’t make money. Fear of what you don’t know because you don’t research enough or at all. This statement also falls in line with knowing is half the battle.If one fails to plan then one plans to fail.
February 15th, 2010 at 5:26 pm (#)
The above information sounds like money can be made if you are dedicated and stay focused. We never had any idea that this kind of money could be made in buying and selling notes until we saw the advertisement on television.
February 15th, 2010 at 8:17 pm (#)
I believe you are correct regarding the popularity of the owner-financing. I sold property by being the note-holder and I’ve also had a mortgage and a note owed, so I could buy my own home, as a self-employeed, single mother. These are very much needed instruments in selling and acquiring certain properties. I hope you are right. I will be in the position to cash in!
February 21st, 2010 at 8:33 pm (#)
Staying focused we can all do well in 2010.
March 3rd, 2010 at 2:45 pm (#)
I will find these notes no matter what.Because I know there out there to be found and you give all of us the needed help to find them.Just a matter of time.
March 6th, 2010 at 10:57 pm (#)