STRATEGY
NOTE TRENDS
• While market volume may be down slightly year-over- year, note quality is rising
Statistic #3: Average principal at creation on commercial properties rose 8 percent in 2017.
Statistic #5: Down payments have increased every year for the past four years.
Ask yourself: Where can I access high-quality notes?
Action Item: Review the chart below.
Investor's Notes:
• 8 percent fewer seller- financed notes were created in 2017 than in 2016 • The increase in the average principal amount offset the decline in the number of notes Ask yourself: Should I be concerned about this decline in seller-carryback volume? Action Item: Constantly explore your options in note investing, which is still an evolving and emerging market in many ways. If you are not already involved in commercial property mortgage notes, explore this option.
Statistic #6: Almost $8 billion in private notes were created on residential properties over the course of 2017. Investor's Notes: • Larger down payments
Statistics #7-9: Compared to 2016:
• Property sellers who originated just one note in 2017 increased by 5%.
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indicate financially stronger buyers are purchasing properties using seller-financed notes
W.J. Mencarow is president of The Paper Source, Inc., an educational organization for note investors and brokers since 1987. To learn more about note investing, including what can go wrong and how to protect yourself, take a free 7-part e-course at www.PaperSourceOnline.com
OpportunityAbounds in Specialized Real Estate Notes 9 IMPORTANT NOTE STATISTICS FOR YOUR REVIEW.
Review this chart to see how note quality is rising despite slight declines in market volume.
byW. J. Mencarow
Statistic #4: In 2017, notes had larger balances ($17.30
he seller-carryback note market is thriving, and that spells oppor- tunity for note investors. A study of the latest data shows that even though there is a slight drop in the gross number of seller-created trust deeds and mort- gages, the quality is much better. I’ve identified nine significant statistics for note investors in today’s market. Below, we’ll walk through these numbers to expose the opportunities available to active, creative note investors. T
Statistic #1: 89,779 first position seller-carryback notes (residential and commercial) were found in the public record.
billion in 2017 vs. $16.97 billion in 2016) and
offered greater equity.
Statistic #2: The average note principal amount on both residential and commercial at creation increased 2 percent.
52 | think realty magazine :: october 2018
thinkrealty . com | 53
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