Investing in fixed secured real estate notes can yield fruitful returns often higher than mutual funds while providing security of investment only found with bonds and CD's. Conservative investors looking for stable long-term investments such as bonds, CD's or money-markets currently only receive APR rates between 2% and 4%. The inflationary period looming due to government spending, budget deficits and money printing will continue to drive these investments into the ground. A high price to pay for security of investment.

What Is A Fixed Secured Note Backed By Real Estate?

A first position high yield collateralized note much like a lean held by a mortgage lender on a piece of real estate that can be called due if the terms of the agreement are not met between lender and borrower. In this case, the note holder (i.e. private lender) would simply take control of the real estate if the terms of the loan are not met. The borrower (i.e. real estate investor) will buy a piece of real estate with the money provided by the note holder. The two parties agree on a set of terms of the note. The property is purchased and the term starts. A fixed secured note can also provide investors such as retirees tax free income by using a self-directed IRA for the source of the note. For more information on self-directed IRA's visit: http://www.trustetc.com

Terms

The terms of a fixed secured note are generally 3 to 5 years, 6% to 10% APR interest only with monthly payments. There is typically a balloon payment of the original principle payed to the note holder at the end of the term just like a CD.

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Over the past 12 months my partners and I have been buying single family home foreclosures. Homes are selling for deep discounts and providing high cash-flow rates once rented. Our strategy is not to buy and flip, but to buy, rehab then rent to provide cash-flow and capital appreciation. On the surface this may seem as easy as drinking coffee because of the high number of foreclosures available. But don't be fooled with high quantity and low prices. Buying foreclosure properties is not as easy as it may seem. Buying houses for cash has been our strategy which is one way to up your chances of success. Refer to my previous article "Buying Real Estate With All-Cash" In todays article I'll outline another strategy that when paired with all-cash works for us.

Buying homes at deep discounts for cash relieves vacancy pressure as there is no unerlying mortgage. You may still have a lean on the property held by a private lender but hopefully you have worked out the terms so that you have 60-90 days until your first interest payment. Racing out to find a tenant before your first payment is no longer a pressing issue. You can be more choosy when screening tenants. You can hold closer to your asking rent price and not decrease it just to get the property occupied. You can save money by performing more of the rehab yourself. These are just a few of the benefits.

As easy as it might seem to buy real estate at low prices, a problem has arrisen that must be addressed if we are to successfully close deals with banks. I have found, as with many of my collegues that seller real estate agents have all the control when it comes to you submitting your offer, deciphering which offers to submit, how much information they tell you ahead of time, and lets face it some blatently do nothing. As a buyer in the past I have typically used a buying real estate agent to help me track down candidate properties, perform showings and leg work. As a result I did not close many deals dispite offering near or above asking price. The reason...

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The Real Estate carnival has come to town......some want to get off the rides while countless more not so experienced in the roller coaster market want to try their hand at it.

With losses on Wall Street nearing in the trillions one would assume that investors would have learned to test the temperature of the water before diving in. On the contrary, many are jumping in to the fray with little thought like a karaoke singer, having performed a couple of times who suddenly thinks that he will get discovered and become superstar music artist overnight.

These investors who are new to the game of the real estate market subscribe to the philosophy that everything that goes down will go up again in quick turn around time but being new to throwing in your hand to the poker game of real estate requires thought and precision in regards to timing.

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Let's face it, with the real estate market as fragile as it is these days, anyone looking to enter the business of renting has ominous decisions to make in order to turn that property into profit. Every aspiring landlord has to start somewhere, so here are a few of the options - along with some risks and rewards - to consider when buying property with intent to rent: apartments and townhouses, the n-plex, and the single family home.

Apartment buildings and townhouses are viable options when trying to maximize profits in minimal space. This space may be limited by scarcity of land or a high price on the land that is available. The pros of such a setup are somewhat obvious. More units equal more tenants, more tenants equal more rents collected, and profits rise. Typically apartment buildings and townhouses also have the size and means to support a handyman or in-house maintenance. This takes some of the burden of repairs (and a tenant's unhappy wrath) off of the owner. As many landlords could testify, this is worth whatever cost to renovate or build an apartment building or townhouse. But with every pro, there is a con. In this case, the reality of many different people and personalities in a limited space has the inevitability of crossing one another. Lack of privacy, personal property disputes, pets, and children, residents with alcohol or drug related problems and noise complaints are just a few of the possible pitfalls. Though the owner may not necessarily have to deal with these, a reputation for an unpleasant living space is a real estate killer.

The n-plex usually refers to a duplex, but variations such as the 3-plex, 4-plex, and so on do exist. This is considered by many to be one of the higher risk rental options. It stems from the effort of the land owner to either diversify or increase income from a simple dwelling. This option also allows for a bit more personal space for the tenants, as a duplex customarily offers a yard or some outdoor space as well as a garage and more square footage in the home itself. However, the success of an n-plex rests heavily on the compatibility of the (considerably fewer) tenants. If one tenant has a bad experience, the space may be harder to fill, and that is a vacant space the landlord then has to maintain out of pocket. The n-plex has a strange place in the crux of markets. On one hand, people may like the extra space at a little lower cost. On the other, if they are ready for that much space, why not just go and get a single-family home and not have to share the headaches?

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