Let’s Be Brutally Honest About Real Estate Notes

There is a difference between being honest and being brutally honest. For example, if I ask my wife if my new sweatshirt makes my gut look big, an honest answer might be “Kinda”. A brutally honest answer would be “No, your gut makes your gut look big.”

As someone who has taken literally thousands of phone calls from note holders, I’ve always been honest, but I’ve never been brutally honest, until today. Read more

How to Sell Your Mortgage Note

Tired of receiving monthly payments?

Wishing for a lump sum of cash today?

If you sold property with seller financing chances are you’ve wondered about selling the real estate note. Here’s how to sell a mortgage note, trust deed, or contract in 7 easy steps.

Step #1 – Request Quote

Just complete a short informational worksheet to receive a free no obligation quote. This can be submitted online, by fax, or over the phone.

Click Here for a List of Note Buyers

Click Here to Download a Worksheet (PDF)

Step #2 – Provide Document Copies

To get started note buyers like to see copies of these three documents:

• Settlement Statement
• Promissory Note
• Mortgage, Trust Deed, or Contract

It is also a good time to be sure you know where the originals are located, especially the Promissory Note, as they will be requested at closing.

Step #3 – Accept Offer & Agreement

Once an offer is accepted it will be outlined in a written agreement. In addition to stating the price, the agreement will specify conditions of closing and who pays costs.

Step #4 – Note Buyer Review

The mortgage note buyer will perform a detailed review of the transaction, known as due diligence. This includes a review of the buyer’s credit, current tax and insurance status, payer interview, and other important items. They may also request copies of additional documents including a payment history, insurance policy, and existing title report.

Step #5 – Appraisal

The note investor will order an evaluation of the current property value. This usually takes the form of a BPO or drive-by appraisal. The investor wants to be sure the property value is still equal to or greater than the sales price. If the value comes in low, the note investor may present a revised offer for consideration.

Step #6 – Title Search

The title search verifies ownership of the property and the mortgage note. It saves time and money to work with any title report that might exist from the original sale date. If the title search shows money is still owed on a prior mortgage it will usually be paid from proceeds.

Step #7 – Closing

When all steps are complete the note buyer will send the final closing documents for signature. The title company is often used to handle the exchange of money for the original note and transfer documents. Funds are typically paid in the form of a wire transfer or cashier’s check. You are also encouraged to have your attorney review and advise with the closing process.

Selling your mortgage note can be a simple process when you work with an experienced note buyer. Just take a few minutes upfront to gather your information and documents and they will handle the rest for you!

Sometimes it is not only what you know, but who you know.

Knowing the right people can not only make things easier, in the case of the 2010 Directory of Owner Financed Note Buyers, it could also make you more money!

Gain access to our personal Rolodex of experienced note professionals that took years to develop.  Work direct with knowledgeable investors, educators, and master note brokers.

What to Do When a Balloon Mortgage Payment is Due – Real Deal #158

Owner financed notes often include a balloon payment requiring the buyer to refinance in order to payoff the remaining amount due the seller.

But what options are there for notes when a balloon is due but the buyer can’t refinance? Should the seller consider extending? Read more

How Much Will You Pay For My Note?

If you buy or broker notes, you know pricing is the first thing sellers ask when looking to cash-out their payments from a seller carry back. Discover what sellers are really asking and the best way to answer the “What’s Your Discount” question.

It’s natural for sellers to want to know the amount of money they will receive to sell future payments on a contract or mortgage. After all, it is the need for cash that made them make the call in the first place.

But if you listen closely, you will realize they are asking something beyond just the bottom line number. Sellers want to know:

Will you pay me a competitive price?

Are you trying to take advantage of me?

Will you treat me fairly?

This means the answer needs to accomplish several things: Read more

Note Buyer Success Story

Canyon Capital has been added to the Directory of Owner Financed Note Buyers. Discover a new investor listing and read how the owner went from start-up note broker to note buyer in just a few short years.

Note Investor (NI) recently interviewed Greg Gehlen (GG) to learn more about his note buying programs. Canyon Capital specializes in mobile homes on land and pays fees to cash flow brokers for the purchase of notes, trust deeds, and contracts.

NI: What is the current focus of your company?

GG: We buy seller-financed first-position lien notes in the Western U.S. Our primary focus is buying partials to still keep deals together that may not otherwise work.

NI: How did you get your start in the note business?

GG: In 2004 I wanted to buy or start a business and after I looked at a number of existing businesses I decided the best option for me would be to start a business. I attended Noteworthy here in Las Vegas and found a wealth of great information (people and materials) at the conference to get started in the paper business.

NI: What unique benefits does your company provide?

GG: We are able to make decisions quickly on files and we also buy notes that many people are not interested in – mobile homes on land.

NI: What type of notes or transactions will your company consider funding?

GG: We buy notes in the Western U.S. which includes WA, OR, CA, AZ, NV, NM, UT, CO, MT, ID, and WY. The type of note we prefer is mobile homes on land (no park paper). We will look at notes up to $150,000 but prefer partials under $50,000. We like to look at credit if possible but down payment, a solid pay history and property value are more important to us.

NI: What type of deals would just waste your time?

GG: New notes with small down payments and poor credit are not files we will fund.

NI: What do you consider the best methods for finding cash flow notes? Read more

Top 5 Articles on Seller Financing

Owner financing was a hot topic in real estate last year and all indicators point to increased demand in 2010.

In search of alternative financing methods, Read more

Considering a Career as a Note Broker? Here Are 5 Things You Should Know!

You probably have heard you can make great profits buying notes, if you have your own money.

But what if you need to MAKE money before you can think about investing? A career as a note consultant may be the answer for you. Read more

Owner Financing – The Top 3 Reasons for Seller Financing

All things being equal, the average seller would prefer to sell a property and walk away from closing with all cash rather than a note for part of the sale price.

Then why do sellers agree to take back financing? Here are the three most common reasons behind the installment sale. Read more

Become Your Own Investor!

“You can make a living brokering notes but you get wealthy owning notes!” This statement from a pioneer note investor provided one of those “light bulb” moments. Determined to start owning notes, I left a ten-year “job” in the corporate note buying world to start my own note business in 1997.

Note ownership and long term interest income are truly attainable with little to no investment of your own cash funds. But how does a note broker start making the move to note owner? Here are five strategies that helped us to make money and become our own investor. Read more

Full or Partial Mortgage Sale? It’s All Dollars and “Sense”

Deciding whether or not to sell your mortgage note is easier when someone simply offers you a “Full” purchase. In addition to being a straightforward buyout of all the remaining payments, it also makes it easy to determine what you are receiving.

For example, if you are offered $85,316 for a $100,000 balance mortgage note, you are selling the note at a $14,684 discount. That may sound like a lot, but you now have $85,316 up front rather than waiting over time to collect payments.

The part that gets a little tricky is when you are offered partial purchase options. Read more

Next Page »