MAKE CONTRACTORS HAPPY Have a contractor offer these terms on a $10,000 job: zero down, a note with 36 monthly payments of $350.00 secured by the customer’s home. You pay $8,000 for the note. The contractor gets the work (inflating his price in return for easy terms) and you make 32 percent. BUYANOTE FOR “FULL PRICE” You find a $50,000 note, 10 percent, 120 payments of $661.00, and the seller will not take a discount. Offer to buy the note in two installments: $25,000 now for the next 60 payments, and then another $25,000 for the remaining 60 payments. Your yield is 20 percent. But wait, there’s more! Offer a third for a third: $16,667 (a third of $50,000) for the next 40 payments, then the same amount for the next 40, and the same for the last 40. Your yield is 30 percent. What about offering a fourth for a fourth? The seller would get paid faster, and your yield is 39 percent. 10 FOR 12 Offer a note seller an amount equal to 10 of the note payments for the right to receive the next 12 payments. For example, on a $50,000 note paying $661.00 per month you would offer $6,610 to get the next 12 pay- ments. Your yield is 35.07 percent. That yield is always the same for any note.

BUYAHOUSEATADISCOUNT A seller wants $200,000 for her free and clear house. With $40,000 down she will carry a $160,000 note for 15 years at six percent, $1,350.00 per month. Your offer is $40,000 down and a $160,000 eight percent 15-year first lien note, $1,529.00 per month, secured by a house worth $300,000. She will get her down payment plus a note paying $179.00 per month more than she asked for on a house worth $100,000 more paid by an owner-oc- cupant instead of an investor (less likely to default). You bought that note for $120,850. She has a better note than she expected, and you have bought a $200,000 house for $160,850, a 20 percent discount. IWILL LEAVEYOUWITHWHAT I CALL: THEWORLD’S GREATEST RETIREMENT PLAN You find a $50,000 note at eight percent, 180 monthly payments of $478.00. You buy it for $40,000. You sell the next 120 payments to an investor at five percent inter - est for $45,050, a $5,050 instant profit. But wait, there’s more! When the investor gets his 120 payments the note will still be paying $478.00 per month for another 60 months. Who gets them? YOU DO...with nothing invested. Do that over and over again, and you will be set for life. •

W. J. Mencarow is a real estate investor (including farmland) with over 35 years of experience. He offers a free e-course on real estate note investing at

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