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27th January 2011
By John Hill in Real Estate Law
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Last month, I was invited to make a presentation to a local Rotary club about trends in real estate and the economy. This was no dog and pony show with an eternal happy face. On the contrary, I warned the audience early on that, if they get easily depressed, this would be a good time to take their medication. In my opinion, there is very little of which to be optimistic about either the U.S. economy or real estate.

Toward the end of my presentation, a woman in the audience, looking frustrated and out of sorts, asked where she should invest her hard-earned dollars. After all, I had dinged real estate, stocks, muni bonds, etc. rather heavily, so she asked what was left.

Unfortunately, my response was probably of little help, as there are few options that provide a decent rate of return right now without taking on a large amount of risk (i.e., gold, commodities, higher-yielding stocks). I am a mortgage buyer by trade, which means that my business is buying one mortgage note at a time from people who owner-financing their property and now want to sell their real estate note. Being a mortgage note buyer allows me to get a good return on my investment without taking excessive risks. However, buying real estate notes should only be undertaken by someone with experience in the industry, preferably someone who has bought a real estate note before.

That said, if you have a property owned free and clear that you want to sell and have a professional to advise you, consider selling the property using owner financing and create a mortgage note (a.k.a. real estate note). That way, you receive profit from the transaction but also ongoing monthly revenue as the mortgage note gets paid down. After you have collected payments for a couple of months, you can elect to either keep the note or sell the real estate note to a mortgage note buyer like us

Whether or not you have a real estate note, be careful with your investing. As I told the audience, while it is frustrating to only get 1-2% returns, that is a whole lot better than losing 10%, 20%, or more from investing in overly risky stocks or other trades. For now, just keep an eye on things, as there may be some opportunities to buy on the dips, which I am confident are coming on a grand scale!

Alan Noblitt is the owner of Seascape Capital Inc., which buys real estate notes. He may be reached at (858) 672-4678 or toll-free at 1-800-634-4697. If you would like to learn more about real estate notes and read informational articles, visit

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