OWNER FINANCING MADE EASY

The Safest Way To Increase Profit, Sell Quickly, And

Create Cash Flow!

How To Take Back a Note or Mortgage Without Being Taken

By Broadbent & Rosenberg with Creative Solutions, Inc. Real Estate Consultants, Publishers & Note Investors
(Since 1974)

Sellers, buyers, real estate and mortgage investors can benefit from the authors' combined 80 years experience in real estate. Includes the Stepped Payment
CD-ROM.

TABLE OF CONTENTS of Owner Will Carry

CHAPTER 1: An Important Marketing Strategy
This is NOT a California-only book! The authors only coincidentally work and sleep in sunny California. Seller carryback financing works in EVERY state.

We begin by defining seller carryback financing. We then discuss the terms used and explain their definitions and their functions. Some relatively new terms are introduced and explained throughout the book. Documents used are defined here and are shown throughout the book. We introduce our cast of characters and tell the part each plays. By using these characters, we hope to make our examples come alive. We focus on the advantages and disadvantages of seller carryback financing to both seller and buyer. Seller and buyer checklists for using carryback financing follow.

References:
- Seller carryback financing defined
- Terms used
- Documents used
- Cast of characters introduced
- Advantages to seller and to buyer of carryback financing
- Checklists for sellers and buyers for using carryback financing

CHAPTER 2: Negotiations
"If you never remember anything else from this book, remember that all elements of a real estate transaction are negotiable." That quote from the chapter sets our stage. We introduce the time value of money concepts of "MORE SOONER IS BETTER' and "LESS LATER IS BETTER." Then Sam & Sally Seller meet Bob & Betty Buyer. An example of a transaction that includes a simple seller carryback negotiation and transaction follow.

References:
- Negotiable elements of a real estate transaction
- Time value of money concept introduced
- Example of seller carryback financing

CHAPTER 3: Items to Consider When Drawing A Note
What items should be in a note? Better, what items must be in a note? We tell that here. Then usury (charging too much interest) and imputed interest (charging too little interest) are discussed. Late charges - when and how to use them - along with a sample late charge clause come next. Understanding the prepayment penalty and appropriate language for its use follow. Then the due-on-sale clause and a sample of same is shown. Each is related to a note and shown by example.

References:
- Items that need to be in a note
- Other considerations: Usury, imputed interest, late charges, prepayment penalty, due-on-sale clause

CHAPTER 4: Alternative Financing Structures
First we had to set the table. Now comes the main course. Are two or three carryback notes better than only one? The protective equity concept is illustrated by example and emphasized as an important theme. This is critical information for those people who structure, buy, sell, or invest in notes. How can sellers improve their security before agreeing to carry a note? A discussion of seller carryback notes with existing assumable financing follows, first with a balloon payment, then with wraparound (all-inclusive) financing, complete with detailed examples of each. Yields to the seller are compared for each variation.

References:
- Using multiple carryback notes
- Assuming existing financing with a balloon payment
- Improving security on a note with a wraparound loan

CHAPTER 5: Balloon Payments
The pros and cons of balloon payments are aired. Different methods of calculating a balloon payment are explained. We give sample wording for a balloon payment note. Not content with having floated a balloon, we now show how to defuse it, so it doesn't become a problem. Even better for both buyer and seller, we show how to avoid a balloon payment and its inherent problems.

References:
- Pros and cons of balloon payments
- Sample balloon payment wording
- How to defuse balloon payments
- How to avoid balloon payments

CHAPTER 6: To Keep, Sell, Exchange, or Borrow? That is THE question.
Now that the seller has carried back a note, we explain, then evaluate each alternative. Calculations show: How to amortize a note (several ways), how to discount a note (several ways), and how to use a financial calculator for fun and profit. Handling note collections, transfer by assignment vs. endorsement, and finding a buyer for a note are explained. Loan to value ratio ranges, discounting, and restructuring are illustrated. Examples of exchanging a note at face value are discussed. Here's another BIG bonus: New material here on the Memo of Modification. We've never seen this information anywhere else!

References:
- Alternatives: Keep, sell, exchange the note or borrow on it?
- Calculations for amortizing and discounting
- Different ways to raise cash from an existing note

CHAPTER 7: Agency Issues Involving Trust Deeds and Mortgages
Answers some questions: Who does your real estate agent represent? How can consumers tell which agents understand how to maneuver paper? Private lenders and note investors: Who is looking out for you? Loan brokers, agents and others buying and selling notes: Do you have your agency hat on straight? And, using our Agency Disclosure Document, we show how each agent should document his or her representation in a real estate transaction.

References:
- Agency issues as applied to real estate agents, private lenders, note investors, loan brokers, note sellers, note buyers and note brokers
- Using an Agency Disclosure Document

CHAPTER 8: What's Wrong With An 80-10-10 Sale?
The reader now learns what an 80-10-10 transaction is. By understanding the risks and pitfalls involved, you will learn how to turn a potential lemon into lemonade. A novice seller can lose his shirt by not knowing how to dramatically reduce the risks involved in an 80- 10- 10 deal. Agents learn how to protect their client and themselves. We tell you how to avoid the pitfalls. What may seem like a shaky deal can be turned into a solid transaction. Tune in here to find out how. We show you two alternative methods to dispose of a 2nd that originated in an 80- 10- 10 transaction. How safe is a first mortgage when the down payment is less than 10%? Let's look at a foreclosure situation, run some numbers and see!

References:
- Risks of an 80-10-10 transaction
- How to reduce most of the risk on a carryback 2nd in an 80-10-10 transaction

CHAPTER 9: How To Reduce The Seller's Risk When Carrying Back A Note
1. How to reduce the risk of not being paid the balloon payment.
2. How to structure a carryback note to minimize risk.
3. Using a deed of trust on another property as additional security to secure an existing T/D note.
4. How to use existing notes to give you, the seller, added protection.
Here we discuss the tax consequences of assigning a secured note as collateral for another loan. Bet you didn't know!

When you are looking for property with seller financing, you need to know who and what to look for. You may need the help of a Buyer's agent. We tell you what to look for in property and in a Buyer's agent, to enhance your chances for a successful transaction.

References: How to reduce risk to the seller when s/he is asked to carry back a note:
- When a balloon payment is involved
- By properly structuring the note
- By using a buyer's existing or created note

CHAPTER 10: A "No Money Down" Transaction vs. A "Nothing Down" Deal
What's the difference? Plenty! In a "nothing down" deal the buyer has nothing to lose and the seller may lose all. In the other the seller is well-secured and the buyer has responsibility. We go into great detail with examples showing how each one works. Learn how to use the system to give you as a seller much more protective equity!

Agents should understand these concepts so they can benefit and protect their clients.

Properly used, these techniques mean faster sales, more transactions and commissions.

References:
- What is a "no money down" transaction?
- What is a "nothing down" transaction?
- How each one works

CHAPTER 11: The Substitution Of Security/Collateral Alternative
Don't be frightened by the title. Or confused. Simply put, a seller may obtain better security for his carryback note than his own property! Why and how to do it? Fully discussed with supporting forms to illustrate. Many agents and consumers don't know about security substitution. Learn how safe and simple the process can be. Why and how it can be the superior alternative to subordination.

References:
- How to use something other than the property being sold to secure a carryback note

CHAPTER 12: To Prevent Surprises, Here Is A Checklist To Use Before You Agree To Carry Back A Note Or Before You Buy an Existing Note
No, this chapter is not out of place. We needed to lay the groundwork by examples for the points discussed here. The examples shown throughout the book are used to refer to a seller's or note buyer's checklist of requirements. Here Bill Broadbent shows HIS PERSONAL LIST of 15 points to check before carrying back a note, funding a loan, or buying a note at discount! Important, This chapter provides sample forms and references to guide you.

References:
- Checklist for either carrying back a note or for buying a note
- Sample forms to use with the checklist

- CHAPTER 13: Use Of Multiple Notes For Flexibility
At this point the reader understands how and when to use lst, 2nd and 3rd trust deeds and/or mortgages. Ah! but more complex situations may arise. These involve: Divorce, dissolving a partnership, settling an estate. Each may call for multiple notes. Learn how to handle each. Examples and forms we have used will give you an idea how to do it. When the transaction calls for using multiple notes, know how! Be sure to tailor each form to fit your specific situation.

References:
- When and how to use multiple carryback notes

CHAPTER 14: Other Uses For Trust Deeds And Mortgages
What? More uses? How can that be? Well, this chapter alone is worth many times the price of this book! Learn how a guarantor (co-signer) on a note, who is not on title to the property, can protect himself if the primary borrower defaults. Wonderful information for those who can't turn down friends and relatives when asked to guarantee (co-sign) a note. To wind things up, we suggest a unique and creative approach, the Performance Note.

CHAPTER 15: Mobile Home Notes
How they differ from real estate notes. We look at the near-term risk of changes in land space rent and the long-term risk of potential changes in park ownership and or land usage. Other variables pertinent to mobile home notes are examined. We provide suggestions to minimize risk when creating or buying mobile home notes.

References:
- Credit report authorization

CHAPTER 16: Tips For Selling Your Business and Taking Back a Safe and Salable Note
What documents do you use when selling a business? Here are some perspectives on down payments, several of which are frequently overlooked. What items should be in a business note? Other important factors to consider when creating or selling, or buying a business note.

References:
- Credit Report Authorization
- Promissory Note
- Security Agreement
- UCC I Statement

In June 2002 the authors of "Owner Will Carry" acquired a step payment program for sellers, buyers and note investors. The following articles and interactive forms (you can fill in the blanks) are also included on the CD-ROM.

INTERACTIVE FORMS ON THE STEPPED PAYMENT CD-ROM
A supplement to the book, Owner Will Carry, by Broadbent & Rosenberg

1. Agreement for Performance Deed of Trust
Chapter 14 pages 159-161. As a guarantor with loan liability but no ownership interest, here's how to protect yourself if the note borrower defaults.

2. Collateral Note and Pledge Agreement
When personal property is used as collateral to secure a note.

3. Credit Report Authorization
For you to assume a seller carryback note, you authorize a credit report.

4. Credit Report Authorization (on note payor)
When buying a note, borrowers authorize you to check their credit.

5. Memorandum (to record) a Note Modification (secured by Deed of Trust)
Chapter 6 page 96. Show that note was modified on the County records.

6. Modification of Promissory Note
Chapter 6 page 95. Example of form filled in.

7. Non Acceleration Letter to Lender
Chapter 12 pages 142-144. To senior lien holder when buying a note.

8. Promissory Note in "Plain English" & Deed of Trust in "Plain English"
We're still working on a few words, but mostly no lawyer language.

9. Promissory Note (unsecured/installment with bankruptcy language)
What happens if the payor declares bankruptcy on an unsecured note?

10. Promissory Note (interest only) Secured by Pledge of Collateral
Collect on a note secured by personal property (collateral)

11. Notice of Balloon Payment Due (required by law in CA)
Chapter 5 page 68. This is a good idea to use in any state.

12. Straight Note
Chapter 4 page 56.

ARTICLES ON THE STEPPED PAYMENT CD-ROM

1. The importance of Loan to Value (LTV).
2. Who Benefits from Stepped Payments?
3. The Case for Stepped Payments.
4. Donating a Note to Charity: Opinion Letter from a tax attorney.

In addition to the Chapters and pages noted above, in our book, Owner Will Carry, the following Chapter and page locations are where stepped payments can be used:

Chapter 2: Negotiations
Page 32 - The time value of money. "More sooner is better."

Chapter 5: Balloon Payments
Pages 70-72 - Stepped payments explained with an example
Page 74 - As an alternative to bi-weekly payments
Page 76 - To increase equity

Chapter 6: To Keep, Sell or Exchange? That Is The Question
Page 93 - Restructuring a note to increase yield

Chapter 8: What's Wrong With an 80-10-10 Sale?
Page 110 - Why balloon payments may be dangerous

Chapter 9: How To Reduce the Seller's Risk When

Carrying Back a Note
Pages 118 & 119 - The high cost of refinancing

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An Action Plan for Managing Your Note Investment:

What Happens After Owner Financing

Sure, everyone talks about owner financing properties and what a great way it is to sell property fast, at a better than fair market price, and without the limitations, guidelines, restrictions, hassles, and delays of bank financing. But, NO ONE teaches you how to create a valuable note.

This document explains clauses and requirements you should use to protect your investment as well as how to create a very, very valuable note in case you decide to sell it. Additionally, NO ONE teaches you all the things you must do on an annual basis to safeguard your note investment.

This document discusses tips and techniques to secure your investment and it even explains all the terms used in your sale documents that you and your new buyer signed.

The Note Owner’s Guide is only $39.99 but may save you thousands in potential real estate headaches!

Own Your Copy Today! Act now, get knowledgeable about your investment, and save money by reducing potential annual risks!