We finance most of the auction houses we purchase by selling a private mortgage on the property. Frequently, the mortgage amount even includes most of the money needed for the fix-up and repair. Although private mortgage money costs more than bank financing, it's much cheaper than sharing your profit with a partner. Many investors like to buy real estate paper because they can obtain a very good return on their investment. Since the investment is secured by real estate, it is much safer than the stock market.
Many investors place an ad there when they want to buy private mortgages.
People who want to sell a mortgage place ads there too. Quickly Our mortgages are created in escrow, and we use the proceeds of the loan to purchase the property. When you structure your mortgage, be generous with the interest rate and yield you offer, and keep the term short. Remember, this is a first position mortgage, so that is a very strong yield, given the current low interest rates. By prepaying, we also don't have to worry about making mortgage payments while we fix up the property and resell it to the new buyer.