Promissory Note Investing Checklist – Note Investing Appraisal Guidelines

You are an investment appraiser.

Whether you realize it or not, being an investor forces you to appraise and value an asset.

You may not be consciously aware of it, but that is exactly what you are doing. You are evaluating what that asset is worth to you. Consequently, you should do the valuation process in an organized manner, not by the seat of your pants-not “unconsciously”. You should have a promissory note investment checklist tailored to your specific situation, needs, and goals.

Never invest in a promissory note you do not understand.

This is a fundamental rule. It sounds like a simple and easy thing to do; but, it is not simple or easy. It requires your time, attention, and concentration to do it properly. Initially, it will be challenging, but, as with most difficult thing, “practice makes perfect”. Do not skip this step.

Note investing guidelines and checklist.
Following are key questions that require answers. Let’s review them one at a time.

Do you understand the terms of the note? The note document, its language, terms, and conditions control the investment. If you do not understand the terms of the note, that is a reason to go no further. Get independent, expert help before proceeding.

Does the yield, or interest, rate fit your needs? Since you are investing to earn income, know in advance what yield or interest rate you need to make the investment. Have guidelines.

Does the note provide for future interest rate adjustments? If the term of the note is over three years, a provision for an interest rate adjustment should be provided.

Does the length of the loan fit your needs? Do not invest in a five year note if you will need repayment in three years. Before investing, know when you need to be repaid. Have guidelines.

Does the amount of the payments fit your needs? Since you are investing for income, know in advance what size payment you need to receive. Have…

Source by Lawrence Tepper

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Promissory Note Investing Checklist – Note Investing Appraisal Guidelines published first on http://www.noteseminars.com/
Promissory Note Investing Checklist – Note Investing Appraisal Guidelines published first on http://www.noteseminars.com/