Offlineanyone aware of this subject about buying property buy way of using ideminty{srry for the spelling}bonds,via directly with mortgage companies or by an investor themselves plz give any feedback..much will be appreacitaed..if anyone whom may also know of any investors as well whom may accept these types of deals plz help!!!!! tony penn...either post or send via eml to me thanks everyone!!! : )
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Upon further research it seems that an indemnity bond is a specified bond or note that is written to indemnify (hold harmless) a company or person.
That being said notes and bonds are used to buy property regularly. In fact there is a whole sub-purchasing culture that does this concept. There is a lady, whose name skips me, from Colorado who has a whole program on this.
Here is the basis of how this works:
1) You purchase a paying, current, bond or note below its face, not market, value.
i) Example: the face value or what is owed is $100,000 and you purchase the note at $70,000.
2) The equity that you purchased into on the note is an asset. This asset of $30,000 can be traded and/or sold.
3) If you had a house that for some reason was selling for $30,000 you could trade the active note or bond for the house.
People, companies and even banks will do this most likely because they are giving up a non performing asset for a performing asset and have gained the equity for the trade.
A link for an example of an indemnity bond is: http://www.statewide-title.com/indem.htm
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and wished that you may of knew some one or an investor/company that will help buy out my mortgage loan and in turn i can buy it from thier possesion for a nice sizable profit via bond,can you help??do you know anyone that might?? I APPRECIATE IT tony from also arizona where it's amazinglly hotttttt
Here is the basis of how this works:
1) You purchase a paying, current, bond or note below its face, not market, value.
i) Example: the face value or what is owed is $100,000 and you purchase the note at $70,000.
2) The equity that you purchased into on the note is an asset. This asset of $30,000 can be traded and/or sold.
3) If you had a house that for some reason was selling for $30,000 you could trade the active note or bond for the house.
I think you mean a house selling for 100K. Why you pay 70K for the note and then trade it for something was only worth 30K?
Nate, do you mean you still receive payments on the $70,000 and you can ALSO trade the $30,000 equity for a performing asset, such as the house for $30,000?
Thank you for the link. I have to print out that document and study it. Looks very complicated.
Rina
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Here is the basis of how this works:
1) You purchase a paying, current, bond or note below its face, not market, value.
i) Example: the face value or what is owed is $100,000 and you purchase the note at $70,000.
2) The equity that you purchased into on the note is an asset. This asset of $30,000 can be traded and/or sold.
3) If you had a house that for some reason was selling for $30,000 you could trade the active note or bond for the house.
I think you mean a house selling for 100K. Why you pay 70K for the note and then trade it for something was only worth 30K?
Mark, you should pay the house for $30,000 and then trade it for $70,000? What i got out of it in Nate's example, was the house is value at $100,000 and if he would have bought it for $70,000, he would use the equity of $30,000 for another transaction and still keep the house. I hope that's right, am i right Nate?
The gist of what is going on is this. You are purchasing an asset (in this case a bond) at a discount and then selling/trading it at face value.
It is NOT really different than buying a home from a distressed seller (pre-foreclosure, divorce etc) and then selling it to someone else at its true FMV.
The difference of course is that the house is worth 100K now while the bond will not pay off its 100K until some time in the future. (So taking into account the time value of money, the bond really is NOT worth 100K today in spite of its face value. But if sellers prefer monthly payments to lump sums then some will take the bond.)
I'm curious as I'm looking at all types of financing alternatives.
Would like to hear any success stories 