I liked the idea of buying real estate commissions at a discount. However, it is not clear to me how the documentation would be written to secure the arrangement.
Jack talked about getting a secured note from the broker, but at the same time he said it’s not a loan. Can anyone elaborate on how one could be protected if the deal does not close?
Also, I wonder if there is an opportunity to help other investors buy with a note that is sold at closing (or perhaps help them negotiate seller financing). Many investors in my area are complaining about the difficulty of getting institutional financing and most of them do not understand paper.
I can see how this can be done for short term financing (just like Walter Wofford does it) and still provide a good yield to the note investor. However, it seems to me that on a long term note the discount and/or interest rate would have to be so high that it may not make financial sense for the person buying the house (assuming the note investor wants more than a 10% yield).
Any thoughts?
Pedro Machado