Today’s REI Classroom Lesson

Today, Jack Shea explains how you can use equal dignity notes when you have multiple investors going in on one deal.

REI Classroom Summary

By using equal dignity notes, everyone is equal. You share the payments, problems, losses, and profits.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the flipnerd.com REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Jack: Hi. My name’s Jack Shea and I’m going to be the host for this session. My website is jackshearealestate.com. It talks about a lot of trust and option and IRA type of products and seminars.
Mike: This REI Classroom real estate lesson is sponsored by theinvestormachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
Jack: One thing I use in the note investing realm is when I might have two or three investors in a note or in buying a note, or it could be in a property. Joe is putting in 30,000 and Bob’s putting in 40,000 and I’m putting in some money. There’s, well, who’s on first and who’s on second. What I use, everybody wants the safety and the coverage, so I use what’s known as equal dignity notes.
We all have a note for the separate amounts but we’re all in first place. As payments come in, payments come in, they’re divided 30, 40 and 30 among the parties. We’re in a position where say if we share the payments equally we share . . . Let’s say there are proceeds on a sale or if there’s a problem for missing payments. Everybody’s in the same boat and everybody’s equal and everybody’s aware of the fact.
These equal dignity notes have been used for many years. It solves certain problems with investors are struggling. The first guy wants to be in first position. The next guy doesn’t want to have a second or third mortgage. So it solves that problem and the payments are shared. If there’s a default, we all share in the loss equally. It’s a way to take on partners or share the profits, share if, rare event, but if that happens and everybody knows what position they’re in.
You think about that. Been around for a long time. You might find it used to keep your investors happy that everybody’s in first place. They like that. I hope you can use that in your real estate or note investments to your benefit. I’ll be back. See you next time.
Mike: Are you looking to change your life through real estate investing? If you’re interested in either getting started or taking your business to the next level, please check out FlipNerd’s private program at theinvestormachine.com. This is the most robust real estate investor coaching, networking, and mastermind on the planet and designed for your success.
If you’re ready to roll up your sleeves, ready to take personal responsibility for your own success, and ready to dive into a world class instructional coaching program that provides you step-by-step instruction to help you achieve financial freedom, then you should apply today. Spaces are limited and candidates are only considered after an application and interview process. Our 12-month investor program is unparalleled. Think you might be a fit? Learn more today at theinvestormachine.com.
Please note, the views and opinions expressed by the individuals in this program do not necessarily reflect those of flipnerd.com or any of its partners, advertisers, or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of flipnerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds and get access to hundreds of off-market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at flipnerd.com.
Please check out the FlipNerd family of real estate investing shows where you can access hundreds of expert interviews, quick tips, and lessons from leaders across the real estate investing industry. They’re available at flipnerd.com/shows or simply search for FlipNerd in the iTunes store.

 


 

Jack Shea
I have been investing in real estate, notes and personal property for over 25 years. I use trusts in every deal: options in many and IRAs and 1031 exchanges whenever possible.