(( The following article is an excerpt
from John's book "Creative Paper Formulas"
At our educational seminars I've seen how excited people
get when they see a concept often referred to as "Tails."
The name describes buying the "tail end" of a
note. We've talked about buying partials
and usually described the benefits of buying the first part of
a note. There can be some great benefits in acquiring the end
part of a note. In some cases, it can be a "no cash
needed" way to build a retirement income.
Would you be interested in seeing how to get a free
monthly cash flow of over $400 per month for 15
years? If you don't, you better stop reading right now and
make an appointment with your doctor.
Let's buy a $50,000 note that pays thirty
years and sell off the first 15 years to cover more than the
cost of the entire note. This makes a no cash investment in a
15 year cash flow that begins in 15 years.
The first line shows the $50,000 note and it's
terms. The second line shows the price we would pay to
buy it at a 16% yield. The third line shows what the
note would be worth if we sold the first 15 years to an
investor or institution.
||- 0 -
||- 0 -
||- 0 -
This shows that if we buy the whole note for $32,629
and sell off the first half for $32,948 we would have a
no cash deal and $319 to cover any costs. We are left
with payments of $438.79 per month that begin in 15
years and pay us for 15 years. A free cash flow that
just took us some creativity.
For those who claim little cash to buy notes, this takes
the air out of their argument. There are numerous other ways
to invest in paper when your own funds are limited.
Tax Free If all of this were done through your
self-directed IRA, you can have a tax free cash flow. If
you are not currently using your IRA to invest in notes, you
are losing one of the best benefits available to you.
How is a "self directed" IRA different
from the one you have now? Trick question. It
isn't different at all. The only difference is whether
you are taking an active role and choosing your investments or
leaving the decision to some banker to do it for you.
You can do a "Trustee to Trustee Transfer"
and work with a company that is set up to help you (not
themselves). This transfer is not a "rollover"
and there are no limits or penalties associated with it. If
you would like some more information on tax free profits, drop
me a line.
* The Paper Game Trilogy
* The Paper Game 5-Day Video Training
* Millions Of Mortgages In Minutes