I was interested in taking a look at some paperwork people have used or are using for creating notes for realtors who want money now for commissions that will pay out later. I have some small dollar IRA opportunities and it seems like the season to make such offers due to the upcoming Holidays.
For the realtor, it is cash now in lieu of waiting months for their commission. The amount would be discounted some amount or percentage.
For the IRA owner, it represents a short-term investment and a return on likely a small dollar IRA.
I am not sure of the mechanics of how to do this. The commission will vary based upon the sales price, so maybe you only lend on a percentage of the projected sales price and then discount off othat principle amount. And if the sale never happens, the agreement rolls to another listing. And if there is never a sale, then I’m not sure. Maybe the note is cross-collateralized on something they own somehow.
I’m pretty sure this type of thing is done by some, but I’m not sure how it’s done or what the paperwork would look like.