“The number of seller-financed notes created over the past two years has jumped 40%!”
This breaking news was reported by Scott Arpan of Advanced Seller Data Services (ASDS) based on the analysis of information collected by their company.
They currently compile data from the public recording offices for owner financed real estate notes in over 1600 counties across the United States.
Observations on Owner Financing Market Growth
• The number of seller carry-back loans grew 15% in 2010 and will exceed an additional 25% growth rate in 2011.
• This trend should continue. The first 3 weeks of January 2012 saw a 35% increase in seller loans created over the first 3 weeks of 2011.
• Rehabbers and developers were a major producer of notes through 2007 as indicated by sellers who created more than one note (over 20% of all notes created).
• The current market is dominated by individual sellers who create only one note (over 90% of the market in 2011).
Source: Report released 1/20/12 by Advanced Seller Data Services. See insert for additional details including an owner financing count by state and a graph comparison.
Why Seller Financing Is On The Rise
It’s no secret that banks have tightened lending criteria following the subprime meltdown and a record number of defaults. It takes a credit score over 720 and 20% cash down to qualify for the best conventional financing rates.
On top of all that, many buyers have experienced a decline in their credit ratings due to foreclosure or job loss in the wake of a weak economy and declining real estate market. These ingredients combine to make a recipe for alternative creative financing like the seller carry-back.
About Note Seller Lists
A proven method for finding and buying real estate notes is mailing to owner financed note holders. Advanced Seller Data Services makes it easy to obtain this information by compiling the courthouse data and selling in a convenient ready to use format. No more going to the courthouse to find notes.
When we interviewed ASDS President Scott Arpan back in October of 2010, he predicted this increase with the following comment,
“As real estate agents, sellers and buyers discover the benefits of seller financing we will see even more of a boom. I believe now is the best time to enter the note business since the mid 1990’s.”
You can catch that full interview including information on their services by clicking here: Find Cash Flow Notes with Note Seller Lists or visit them online at NoteSellerList.com.
Learning The Note Business
The note business involves matching sellers with note buyers and earning a fee. As a note broker learns the business they can consider the transition to purchasing notes for their own portfolio or in tax-free retirement accounts. You may enjoy these articles to learn more about the note business:
Learn the Note Business in 60 Seconds?
5 Myths About the Cash Flow Note Business
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