Newsletter – May 2026-“Notes and Taxes”

All About Property Taxes

As a Note investor, why should I care about Property Taxes?  Did you know that unpaid property taxes can result in tax liens on the property and even forfeiture of the underlying property and Note?   What can you do to protect your Note and investment?    

All About Liens and Risk Exposure

Why should I worry about Liens? Are some Liens more important than others? Can a Lien lead to the loss of the underlying property? How can I remove a Lien? As a Note investor, a single unpaid debt can put an entire property at risk—and liens are the mechanism that make it possible!.

Installment Sales – A Powerful Tax Strategy

What if you could sell your property, create monthly income, and avoid paying all your capital gains taxes in one year? The wealthy doesn’t always sell for cash — sometimes they sell for cash flow. Here’s how investors legally spread that tax over decades instead of paying it all at once.

Reduce Tax Burden with Notes

When selling investment property, a great option to reduce your tax exposure is to use Seller Finance Notes. Selling with Notes allows you to utilize the installment sale provision in the tax code to greatly reduce your tax obligation when you sell your property.

By receiving monthly payments over the term of the loan, you will minimize tax exposure (both capital gains and recapture of depreciation) and set you up to receive a future cash flow!

Verify Contact Information

Even though monthly payments are received, a good practice is to reach out to the Borrower and verify their contact information. Over the life of a loan, lots of things change. A critical item is to be able to reach Borrower via phone, email or mail. Also, the contact will allow you to determine if there any other changes with the Borrower.

If the Borrower is a company, check on an annual basis that the company is in good standing with the local and state agencies.   Most states have a website to check on a company status

Verify Insurance is Current

Homeowners insurance is a critical tool to preserve your investment value. Borrowers have the responsibility to maintain valid insure for the life of the loan and should be providing a copy of the policy to you for your records. Check the declaration page that you are listed as a mortgage holder.

Insurance is normally renewed on an annual or semi annual basis.     Take note of the renewal date and add a follow-up to your calendar to make sure there are no lapses.