FAQ Sell Your Note Earn 15% Now! Mortgages

         Airplane Notes             Mobile Home Paper
         Annuities                  REAL ESTATE NOTES
         Auto Paper                 structured Settlements
         BUSINESS NOTES             Viaticals
         Inheritance                Real Estate Joint Ventures    
         Investment Opportunities   Real Estate Exchange
         Lotteries                  Others             

Practical Real Estate Techniques

They say that "death and taxes" are the only two certainties in this life. When it comes to
achieving financial independence, death and taxes are essentially the same thing. Just as
friction wears the tread off your tires, tax friction rubs the shine right off your financial
statement.

Over time, the friction of taxation will do to your financial future what the Colorado River
has done to the Grand Canyon.

In order to build wealth, you must maximize your tax deductions, thus minimizing your
recognized taxable income.

Many property Sellers mistakenly think they need to pull all of the equity out of the
sale of their real estate. Uncle Sam doesn't seem to think that's such a good idea,
especially if you are an investor. That's why he slaps our hands so hard by taxing
us on our gains and rewards us handsomely with tax savings when we structure our
transactions creatively.

The U.S. Tax Code provides several strong incentives for doing just that, and the
effects can be extremely powerful in building wealth. Two of these incentives make
it exceptionally profitable for you to "both a lender, and a borrower be!"

Section 453 of the United States Tax Code (Installment Sales) allows investors to
avoid the bulk of their taxes due on capital gains. Utilizing the Seller Financing
technique, we can defer these taxes by paying them in very small increments over a
long period of time. There are several other benefits as well.

When offering Seller Financing it improves the marketability of our properties. If
structured correctly it also creates an opportunity to maximize sale values. Although
the value added appears more pronounced in a slow market, the tax benefits make Seller
Financing extremely attractive regardless of economic conditions.

Seller Financing or a carryback note also provides us with a well-secured, high-
yielding, near-cash asset that offers us a broad foundation and a great deal of
flexibility in building our investment portfolio. Such notes strengthen our financial
statements, while earning much better returns than saving accounts.

Interest payments can kill our efforts to achieve financial independence. There is
an exception, besides the tax break, that lending our equity brings to the table.
Uncle Sam throws investors another meaty bone as well: Tax Code Section 163, allows
us to write off interest on debt used to finance the purchase of our investment assets!

Financing a high percentage of the purchase price provides a large interest deduction
in the early years of ownership. This deduction generates a tax shelter, which shields
any positive cash flow. It also shelters the non-cash equity buildup occurring through
principal reduction on the loan. At times it may even shelter some of our other income
from taxation as well.

Investment debt allows us to control more properties, so we can build our wealth
portfolios more rapidly. At the same time the mortgage interest deduction reduces
taxation. This allows more of our dollars to remain where they belong -- working for
us to further speed up our accumulation of assets.

By loaning our equity in the form of Seller Financing, and borrowing more heavily
on new acquisitions, we can maximize our yields through increased profits and reduced
taxation. For theinvestor looking to pyramid real estate assets -- the use of these
practical financing techniques is often the best way to go.

Here's a perfect example -- Say a client or an acquaintance owns a $75,000 rental home
with $35,000 in equity.He wants to sell this rental in order to purchase a $120,000
duplex, which has $30,000 in equity. At first glance, a Section 1031 tax deferred
exchange might seem like a good way to go. That could be an excellent strategy. But
what about this...

Say, your client has a solid Buyer who only has $8,000 cash to cover the down payment
for your client's property. The duplex Seller wants to cash out from the sale of his
property. What do you do then? Here is a practical technique that will satisfy
everybody and pump up our client's investment portfolio to boot.

Your client sells his rental home and carries back a Seller Financed second note of
$28,000 for 25 years, at 11.5% interest with an eight year balloon payment due
(charging the Buyer a $1,000 premium to offset your client's closing costs). Your
client nets $7,000 after closing. But with only $7,000 net cash from the sale of the
rental, he is still $23,000 short for closing on the duplex. If your client sells his
note to a note investor or gives the note to the duplex Seller as part of the down
payment, it will trigger a taxable event for your client.

Your client offers the duplex Seller $7,000 cash down and a new second mortgage for
$23,000, which he will sell to an Investor for $20,500 at the close of escrow (a
simultaneous closing"). This new mortgage is amortized over 135 months at 10% with
a balloon due in eight years. To make the note more attractive and reduce the discount,
your client pledges his own $28,000 note (from the sale of his rental property) as
additional collateral for the new $23,000 note he gave to the duplex Seller.

This strategy mitigates your client's capital gains taxes, so his dollars go to work
acquiring more investment assets. The financing structure also gives him a higher
mortgage interest deduction and increases his tax shelter as a result of a new and
higher depreciation basis. Meanwhile, the 11.5% mortgage payments he receives from
his Buyer are covering the payments on the 10% second mortgage he gave to the duplex
Seller.

At the end of the day, your client received all of the same benefits he would have
realized from an exchange. The difference with this more practical approach -- your
 client was also able to loan out $5,000 of his equity and gain an additional $11,042
 over eight years. This is a 14.66% annualized return on his $5,000, by the way.

Using a few practical techniques and the services of a good note broker, you
accomplished your client's investment goals and made him an extra $11,042 in the process!
We aren't surprised when he refers two of his friends to us.

Fax 1 775 640 6558

Call 1 561 840 8644 CellPh 1 561 951-8244 E-Mail: rmealey@usa.net R Mail: P.O. Box 3392 Palm Beach, Florida 33480

FAQ Sell Your Note Earn 15% Now! Available Now

---

Copyright © All rights reserved.