Current Market Trends of Non Performing Notes (NPNs)

The non-performing notes sector has been booming after the market went into debt due to the recession in 2008 and 2009. Now, the banks are selling the non-performing notes rather than foreclosing on them. Maintaining real estate is not what the banks want and that’s why they are now willing to sell these non-performing notes at a discount. Let’s discuss what NPN’s are in case you are new to this type of investing. NPN’s are non-performing loan agreements, which became defaulted due to the … [Read more...]

The Good, Bad, and Ugly Note Sellers

When dealing with a mortgage note seller, what is the most important element of the negotiation process? The amount of the discount? How long it takes to fund? The reputation / credibility of your company? At the end of the day, it is none of the items listed above. Sure, some people will say “price” but the fact of the matter is the value of the note (your bid) is a much smaller piece of the puzzle than people realize. First off, everyone wants 100 cents on the dollar…or more. How … [Read more...]

3 Ways to Boost Your Note Buying Return

First off, this will not be a “math” article. Don’t get me wrong; I love the math behind the scenes when it comes to notes. Buying notes. Selling notes. Brokering notes. It seems, sometimes, when I throw a bunch of numbers around in an article some people tend to get that glossy-eyed look. * (*In all fairness, I really can’t see these people. I mean, this is the Internet and as invasive as it may be, I don’t see each and every face reading this. I just imagine the looks.) Anyway, there … [Read more...]

Can You Please Define Private Mortgage Notes?

Is there a difference between the definition of a private mortgage note and a seller financed note? Better yet, does it even matter? A recent subscriber's questions are answered. "I am getting confused with - what is a private mortgage note and a seller finance note. They both seem the same. A private mortgage note is a note that someone is holding on what was sold. A seller finance note sounds like the same thing to me - a note on property sold and is holding the note? What … [Read more...]

Do Some Investors Pay Par Pricing When Buying Mortgage Notes?

Recently we received a question in the Finding Cash Flow Notes training course related to “par pricing” or "discount" when buying mortgage notes. First off, here is the Note Broker Question… Hello and thank you two for all your help. My question is why would a note investor pay par for a note? I’ve been speaking with a person who helps their clients use OWC (Owner Will Carry). I was informed they are working with a note investor that is willing to buy a note for par. I don’t understand … [Read more...]

How Partials Reduce Note Discount When Selling Mortgages

Is the sticker shock just too much when discounting notes? It might be time to consider selling just some of the remaining payments. Note buyers have long used the partial purchase to reduce their exposure or investment risk, but it also has benefits for the seller. You see the time value of money makes payments due now more valuable than those further out in the future. The partial purchase takes advantage of this by letting the seller cash in the most valuable portion – the more … [Read more...]

Buying Mortgage Notes: 7 Tips for Calculating Cash Flow Notes

If you plan on selling or buying mortgage notes the pricing will eventually come down to some important cash flow calculations.  If you get cold chills or high school flash backs thinking about math you can always leave the number crunching to the note buyers. However, I challenge you to get outside your comfort zone and give these exercises a try. Why? Well knowledge is power and you will be able to know if you are getting a fair (or not so fair) deal when selling mortgage notes. … [Read more...]

Calculating Cash Flow Notes and a Contest!

I have written before about how note buyers accelerate payments on cash flow notes. One such strategy was the Double Your Payment/Cut The Interest Rate in Half. Another method is to simply go for an Early Payment With Incentive. To this day, the following situation is still my favorite example of this method. It was late December and we were looking at a small note with a $10,000 balance. The payment was only $132.15 per month with a 10% interest rate and 120 payments left. The note … [Read more...]

How Note Buyers Can Accelerate Return

Holding or buying mortgage notes and want a quick way to accelerate your return? Sure, you can’t go back to your payer/buyer and tell them to mail more money or even increase their interest rate. Matter of fact, you purchased the note “subject to” all the terms and conditions already in place and can’t change a thing…unless the payer wants to change them! Try this… Offer the payer to cut the interest rate in half (face rate of the note) if they double their payment! Let’s say the … [Read more...]

How Note Buyers Protect Against Rising Interest Rates

I am sure you have heard that rising interest rates have a negative effect on real estate notes and I wanted to take a closer look at why. It is important to understand how rising interest rates affect your current notes and future note investments. … [Read more...]