Structured settlements

Posted on July 20, 2008 by Barry Goldberg

A structured settlement is a payment stream resulting from compensation from a lawsuit, winning the lottery, or selling a mortgage note. The party receiving the payment stream has the guaranteed income over the life of the investment or award. There are good points and bad points to this.

One good thing is that you will have steady income for a long time to come. Some structured settlements last for 20 or 30 years. This will provide income for you and your family on a regular basis. It is also a way to keep the recipient of the award from spending all of his or her money right away.

On the other hand, a payment stream may not be a strong enough instrument to be able to get a loan for something you need right now, such as a home. Sometimes a large down payment is needed to get financing. In addition, the payment stays the same as inflation increases over the years. That makes the payments received 10, 20 or even 30 years down the road less valuable than the payments received today.

If you need a lump sum instead of a payment stream, there are a number of options. Sell all of the payments, or just enough to get the cash you need now. You decide what’s best for your financial future. We are happy to discuss this at any time. Please call.

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Consider Owner Financing

Posted on July 6, 2008 by Barry Goldberg

In the current market, it is hard to get loans to buy properties and many real estate sellers are stuck with properties they can’t sell. There is a plan B! Plan B is to be the lending institution. In other words, sellers can use owner financing to sell the properties and then turn around and sell their owner financed note.

To make a good marketable note that you can sell for the highest amount you should do the following:

  • The down payment should be at least 10%.
  • A competitive interest rate, not too low, not too high. In general, 8-10% is reasonable.
  • Monthly payments are for principal + interest. Avoid interest-only terms.
  • Avoid Balloon payments.
  • Credit score, the higher the better. Make sure you get a credit report on the prospective buyer.
  • The note has to be in 1st position.

In addition you can ask for a higher purchase price when you carry the financing. This is very doable, but please seek professional help if you have questions. Ask around for a local real estate broker that is familiar with owner financing, or contact us, we are here to help.

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Sell Your House Quicker and For More Money

Posted on July 1, 2008 by Barry Goldberg

Being willing to carry back a note on your property, precluding the buyer from having to get bank financing, can be a powerful tool. It can get you a higher price for your home and a quicker sale. In today’s real estate market, this can make the difference between your house languishing on the market for months on end, and finding a buyer and moving on with your life.

Then you have 2 choices:

  • Keep making payments on your current mortgage and retain the difference between what you owe every month, and what you are collecting on the note. You’ve created cash flow for yourself.
  • Sell all or part of the created note. Pay off the mortgage and use the balance for whatever needs you have.

Creating the note properly is the key to getting the most value for this cash flow. Interest rate and the term of the note are very important.

Consult with a professional, or do your research beforehand. A note can be created and sold at the same time if handled properly. It’s worth looking into.

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