Learn the Note Business in 60 Seconds?

Learn Note BusinessOK, you can’t really learn the cash flow note business in just 60 seconds, but this “speed round” of 11 questions will certainly get you started.



What is the Note Industry?

The note business is the buying, selling and brokering of privately held notes.

What is an example of a cash flow note?

Ever see someone selling a property that says, “Owner will Finance?” That means the seller of the property is looking to “be the bank” and payments will be made directly to them. Seller financing is one of most common ways a private mortgage note is created.

How come I never see a “note buyer” office?

Most note brokers work out of their home. Since they seldom ever see the note holders face-to-face, there is usually not a reason for increased overhead.

Do note brokers have staff?

Some do, most don’t. Just depends on how big they are. When people start adding staff they may decide to use office space.

How do note brokers find cash flow notes?

The most common methods used to find cash flow notes are direct mail, placing ads, Internet marketing, and referral networking.

How much money does a note broker make on a deal?

It varies by transaction but the average rule of thumb is between 3-6% of the amount invested (or paid) by the note buyer (For more details read Note Broker Fees in the Cash Flow Business)

How is the value of a cash flow note determined?

The fair market value of a note is determined by several factors. The amount of equity in the property, interest rate on the note, terms, seasoning (length of time the payer has made payments), and the payer’s credit will all impact the price paid by note buyers.

Are all promissory notes purchased at a “discount?”

Although possible in theory, it is very rare for notes to be sold at par or no discount. Typically there is a discount to cover the note buyer’s yield along with the hard expenses of closing and any note broker fees.

Can anyone start a note broker business?

Yes, note brokers come from all backgrounds. You do need to become knowledgeable in the industry. It is important to know all the players, the process, basic calculations, as well as the best and most cost efficient marketing methods. Most states don’t require a formal note broker license, although a few (like California) have specific procedures.

How much would it cost for me to learn the note business?

There are a several groups out there that offer training. Many of them don’t really know the industry and most of them overcharge.  In today’s competitive market quality training is available for under $500. With over 30 years combined experience, we feel our course at FindingCashFlowNotesTraining.com is the best in the industry  – and our members agree.

Any final thoughts on buying mortgage notes?

The note industry is like any other legitimate business venture. It takes work. Despite what you may have heard, there is no “get-rich-quick” business. However, if you are looking for a real business, with flexibility and earning potential, you might want to check out the note business.


  1. James MISIORA says

    I would like to learn the note business. Please send me details on getting started. I want to make money right away. Thanks. James Misiora. jwm59jwm@gmail.com

  2. How do County records for each property?
    Is the balance due on sale of the property? Is that a crime I know the note I am buying is not a scam?
    Or someone selling the Brooklyn Bridge or some other property they claim to own?
    or someone taking out multiple loans on the same property?
    Or someone selling over 100% of the property?
    Lots of scams out there.
    Someone impersonating the owner?
    Are “ALL” the mortgage notes 1st liens? county records in the if they don’t pay off or do you have to
    go through the courts and the cost of collection?
    When you buy it does it show in the country records that You hold he lien?
    Any penalties for late payments?
    Can you do a pay on the balance of the note and just keep getting those checks till the unpaid balance is paid off.
    Balloon payment notes.
    Interest only notes?
    Can you structure this to give them a great tax break with home tax deductions?
    Is the home tax deductions likely to be phased out?
    Commercial strip malls and Condos notes?
    Business financing notes? Such as New car or collector car markets?
    Luxury home notes?
    Retirement homes and mountain hide outs?
    Second homes on the lake or in the woods or mountain hillside?
    Refinanced homes?
    Are relators interested in someone willing to finance homes?
    I ask a relator and she knew nothing about the Note buying market… hmmm seems funny that someone in the business doesn’t know what is happening in the market.

    I bought a note from a dealer and he said so much money up front and I though that was my investment and he came back saying I had to pay the interest on the note and that lowered my
    percent on my investment. It was sort of scam deal. I don’t think he disclosed all the cost up front.
    I was a little (unhappy) with this bait and switch deal and the extra cost I had to fork out.
    I never bought anything more from this dishonest dealer…
    New subject…. .
    Does this include tax notes?

  3. Douglas W. Rink says

    Hi Tracy,
    I worked with you in the late 90’s and early 2000’s with Metro. I was considering getting back into to business on a small scale and have concerns about Dodd-Frank and what we used to do with “simultaneous” closings et al. I see a large opportunity potentially with gaps that mortgage lenders are leaving again… one we could help with. Do you see federal regulatory issues would prevent this from being…as Price would say “like its 1999”?
    Kind regards, Tracy Z-
    -Doug Rink
    Newton, NC

  4. Sarah Kenner says

    Hi , my name is Sarah I am interested in starting my own broker business.. I research about a lot of companies and courses to get educated about this industry.. could I get you honest opinion about charter program? With Leland base in to Texas they provide training courses and buy notes

    • Hi Sarah,

      I actually purchased the course in Feb. 2013 and worked with Leland; he actually returns calls and text messages personally. I am making money and was selected to do a testimonial. Although it is a lot of work my biggest check has been $4000 so far.

  5. Melvin Scales says

    Hello everyone,
    Just as an FYI, in North Carolina, a license is not required to broker seller financed notes for real estate and businesses. This was confirmed with two attorneys late in September.

  6. I live in California, does your training include R.E. license? I am also a truck driver, home time 1-1 1/2 days a week. Truthfully, with the time I have to devote to this venture, (of course, you want my money) can I start making money, within 3 weeks or should I look for a less hands on business. I’d appreciate your honesty, honestly!!

  7. @Marge;
    It is great to see others succeed on any level. This business requires resolve and consistency. Without these two characteristics, beginners will be hard-pressed to find their rhythm to success.
    Well done.
    If you are yet in the market for note purchases feel free to contact me.

  8. I’m interested in buying notes to generate passive income but not so much in becoming a note broker. Can I just buy notes through a broker and hire a 3rd party servicing company to handle the accounting? Will my ROI be the same (ie. the income from the note) as if I spent hours finding my own deals? In other words, what’s the difference in income between hiring someone to find the notes for me to buy vs me investing 20 hours a week in doing this?

  9. Hi,can I do this from N.S.,Canada…

    • Hello Kevin,

      I am not familiar with the specific laws of Canada but I do know there have been brokers and investors that operated in Canada. The directory and our articles/training focus on seller financed notes secured by property in the U.S.

  10. I took the Rewey’s course back in November and started direct mailing in earnest at the end of February this year. Being that i work full time and have a large family i can’t say that my efforts are anywhere near full steam. Nor have i done any mailings in the summer when my kids are home. But, i am grateful to say, that i will be closing my second deal this week. I say this not to brag at all but just to say two things one: whether i succeed or not in the future, i can see that this is a “real” business. The more you put in, the more you will get out. And two, the Rewey’s course is solid and the Rewey’s themselves are solid, the “real” thing. Whatever may come, I owe a tremendous thanks to them for their advice, support and encouragement.

    • Thanks Marge for the kind words. It has been a pleasure working with you. A big congrats on your closings. I still remember the great feeling of empowerment after closing my first deal!

    • Hi Marge ,I like your thoughts on the note business .It is true the more you put in, the more you will get out.I think I am going to stick with that thought .Thank you

    • Sheronda Booker says

      Congrats! Did you mail postcards or personal letters?

  11. I started brokering note some six months ago, but have note made a dime . I have sent tons of notes to about four different investors and they all do the same thing,- cut me off as soon as they receive all the details from me. I sent Tons of single notes and some huge pools to the investor I paid to coach me and yet he refused to admit that he has closed on any of the notes I sent him. I feel so bad and discouraged because I worked my ass off to research those notes , I mean a lot of sleepless nights but have nothing to show for it. Why are people so dubious, What is it that I didn’t do right and What advise do you have for me

    • I’m sorry this has been your experience with the note business. Our company believes in putting you direct with the investors rather than working through a middle man. One way to protect yourself is to get an option agreement with the seller before providing the seller’s contact information to the investor. Most investors are honorable but it is always good to protect yourself.

  12. Fernando Ruiz-Bosch says

    Does one require any state license acting solely as a referral agent to a note (buyer) investor for a fee?

    • Most states don’t have a specific license relating to a note broker, note finder, or note consultant. There are a few states (for example California) that require a formal test and license to advertise as a note broker in their state. See this article for more details: https://noteinvestor.com/note-brokers/note-broker-license-ca/

      In the note business you can also have a variety of roles. You could be the seller, a broker, an investor, or an investor that buys property and then frequently carries back notes. The answer varies by the laws of each state and your role in the transaction. Since we are not a licensed attorney we are not able to give any sort of legal advice. This is why we must suggest you check with the laws of your state and/or legal counsel to see how regulation applies to your specific situation and way of operating your business. This question comes down to 1) what license is required to operate a business in general and 2) is there a specific license related to earning a fee as a note finder.

Speak Your Mind