NOTE BUYING
What is Real Estate Note Buying? Get online Quote
Firstly a Real Estate Note is simply another word for the document or ‘paper’ that is used to create the security over a property for repayment of a loan. The most common example of this is a mortgage. Whenever a bank or financial insitituation creates a mortgage it exchanges a lump sum of money called a loan (generally to purchase a property) for monthly payments for a predetermined period of time. The mortgage document usually sets out the terms of the loan, repayments, interest rates, and conditions of the loan and provides the lender with the ability to ‘take’ the property if the loan is not repaid.
A real estate note is another word for that document. It is a financial instrument that can be traded, sold exchanged and bought until it has been redeemed (paid off). At whichtime the mortgage is then extiguished and the lien over the property is released and the document no longer has any value.
Until that time however the ‘note’ has value in that it is generating income in the form of regular payments and that stream of ‘cash flow’ has a monetary value. In other words that future reaccuring income stream of dollars has a cash value.
A note buyer is someone who is prepared to buy that income stream of future payment for a lump sum of cash today. Notes are always purchased at a discount, meaning they are purchased at less than the full value of the balance remaining of the loan.
Why would someone sell their note?
There are many reasons that a lump sum of cash today may be more attractive than waiting years to collect smaller amounts over time. Owner financed mortgages (also known as seller carry backs) are becoming more popular as Real Estate sellers are finding that many buyers today are finding it more difficult to get traditional loans. Note buyers provide away for them to sell their property at a good price faster and by creating an owner carry back ‘note’ the seller can create a mortgage for the buyer and then cash out the ‘note’ (at a discount) to the note buyer.
Property investors to are also recognizing that this is a good stratergy to “flip” properties to buyers who would not qualify for tradional lending. Allowing the investors to realize their profit much quicker so they can move onto their next property deal.
There is also the possiblity, once they have a tenant, they can create their own mortgage, selling it to a note buyer, and still retain ownership of the property and getting cash to buy their the next investment property.
To Find out more about Note Buying.
If the idea of note buying appeals to you and you would like to know more about How to make money from Buying & Selling Real Estate Notes without using any of your own money you can download more information here.
If you have a note FOR SALE or maybe want to find out if you have a ‘saleable note’ and what that might be worth. Click here and get an online quote.
If you would like to learn how to create notes so that the selling of your home or investment property would be easier and quicker because you could offer seller financing then click here.
If you would like to learn how to Sell your house fast in this market. click here
If you would like Peter to do a presentation for you on this interesting subject contact him at peter@CrispSeminars.com for details and availability.
