The number of notes created through owner financing in 2019 reached $23.9 Billion. 2019 Owner Financing Numbers At A Glance There were 86,155 seller financed 1st position notes in 2019 compared to 91,605 in 2018, a 5.95% decrease. The dollar volume of $23.9 Billion was a 7.41% decrease from the $24.9 Billion in 2018. Almost 70% of the notes were created in just ten states. Texas, Florida, California, Arizona, and North Carolina remained the top 5 states for seller financing based … [Read more...]
Are You In The Note Business For The Wrong Reasons?
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The act of buying privately held mortgage notes is a lot of things to a lot of different people. For some, it is a means of investing money and getting a good return on that investment. These ‘Investors’ prefer a predetermined return on investment, backed by real estate, without the hassles of owning real estate. Owning real estate, particularly rental properties, comes with tenants – which, even under the best of circumstances can become strained as the property needs upkeep. Nope, … [Read more...]
Invest in Real Estate Or Mortgage Notes?
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Sit around any after-hours event at an industry convention and you will soon find a heated debate about investing in Real Estate vs. Private Mortgage Notes. Oftentimes people are in one camp or the other (myself included). But which one is better? Well, “better” really depends on your personal investing style. Are you the kind of person that needs to see and feel the asset? Do you want to drive by the property on a regular basis to be sure that it has not burned down? Or, are you the … [Read more...]
Do You Need Your Own Money To Buy Mortgage Notes?
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In what seems like a lifetime ago I learned a very important lesson about investing money. It doesn’t have to be yours. Which was good, because at the time, I didn’t have any money. Well, I had some money, but certainly nothing close enough to purchase my very own private mortgage note. Let me back up for a minute. If you have been cruising around this site, you are probably long since sold on... The Idea of Buying Mortgage Notes Why? … [Read more...]
The Dangerous Side of Buying Partials on Mortgage Notes
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Partials are a great tool in a note investor’s toolbox to mitigate risk, but partials do not completely eliminate your risk. A partial is simply a note investing strategy that enables you to reduce your risk and still get some of the upfront cash to your seller. The dangerous side of partials is that they can give you a false sense of comfort when buying mortgage notes. … [Read more...]
What Determines a Mortgage Note’s Value?
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The second you get past explaining, “What is a private mortgage note?” the next question is, “How do you determine its fair market value?” There are a lot of variables that go into a Note Buyer determining how much a note is worth for lump sum purposes – and each investor may have different hot buttons. Here are the main ones… 1. Credit Score How is the credit on the people who are paying on the mortgage note? Obviously the higher the credit scores the better. That said, many people carry … [Read more...]
Building Your Note Business Requires Putting One Foot Forward
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There are many types of people who go into the Note Business - different ages, different interests, and different motivations. You can sit around guessing the level of success each will get in the beginning but experience has taught me that this is not possible. I have seen well-educated people do nothing. I have seen seemingly “unqualified” people enter the note business and rise to the top. So, what does it take to succeed? Although there are a million variables that people will … [Read more...]
Buying Mortgage Notes? Sometimes It’s The Little Things!
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If you are buying mortgage notes from banks or private sellers then you know sometimes those small pesky details can turn into big trouble. Recently a reader shared one of his note buyer stories of a "good deal gone bad." He was kind enough to let me share his story in hopes of saving others from a similar situation. After you read his story please head over to What Private Note Buyers Can Learn from MERS for tips on safeguarding against this challenging situation. Buying Mortgage Notes … [Read more...]
Do Some Investors Pay Par Pricing When Buying Mortgage Notes?
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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 to Buy Notes: Learning From My Worst Real Estate Note Investment
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Wondering how to buy notes? Get some real life lessons learned from my worst real estate note investment! The note was secured by a small single family house in Arizona. … [Read more...]
