A Real Estate Investor buys either residential or commercial real estate and rents the properties. Real Estate Investor make money from rental income and from
the appreciation of the property.

A Note Investor,Note Buyer also know as a Mortgage Note Buyer makes a profit by purchasing promissory notes/mortgages/trust deeds that provide an income stream to him/her in the form of note payments.

Note Investor vs Real Estate Investor


Easily Sell Your Real Estate Note

If you are a holding a real estate note, you may have thought about selling it. You may have wondered what benefits selling your note might bring, or when is a good time to sell your note, and how to actually go about selling your note.

Consider the benefits you may realize by selling your real estate note:

– You can pay off debt, especially the heavy debt that is charging you at a higher rate of interest than your note is earning. For instance, your home mortgage, car, recreational vehicle or credit cards.

– You may be able to increase the return you make on the sale by reinvesting the proceeds in other potentially high-performing investments.

-You will be free of concerns about the borrower defaulting on the loan or being foreclosed upon. You won’t have to continue to collect monthly payments or accommodate or pursue a borrower who is late in making payments, loses employment or is not able to meet the obligation for any reason.

-You will be free of concerns that taxes, insurance and other liens on the property are being paid. If your note does not place you in first position for pay-off this is an especially large concern.

-The substantial amount of liquid cash you receive from a note sale can be used for important future priorities. You won’t be wasting all those monthly payments you have been receiving. Smaller increments of regular cash-flow have a way of being handled like disposable income and evaporating into impulse purchases or non-essential expenses.

-When you have liquid cash you are in a much better position to handle emergencies of any nature.

-When you have liquid cash you are in a stronger negotiating position with regard to anything you may be purchasing.

-When you have liquid cash you can finally satisfy your dream of travel, education or other pursuits about which you are passionate.

-When you sell your note you will convert your long-term investment into an immediate source of cash.

When considering the timing of your note sale, it’s important to understand that the market value of your real estate note is related to current mainstream interest rates, but in a contrary way. As interest rates go down, the value of your note rises. The opposite is also true; if interest rates rise, the value of your note goes down. In the current climate of historically low interest rates, those considering selling their notes are in a very good position. If your best information sources indicate that future interest rates are more apt to go up than go down, converting your note to cash through a sale now is well-advised.

Selling your real estate note is a relatively simple process involving four general steps:

-The seller must first compile all the information regarding the note that a potential buyer would require in order to value and base an offer.
-Present your note “package” in an organized manner that makes it easy for potential buyers to evaluate the note.
-Negotiate viable offers. If you accept an offer, the buyer will want to confirm the current value of the property securing the note and the payment history of the grantee (payer) of the note. It’s possible further negotiation will take place if the the buyer determines this information does not match up with the package presented.
-Once an offer is finalized a closing is usually scheduled within a few weeks.

To receive a quote on the amount you may be offered for your note right now, answer the questions listed here:

Get Your Free Note Quote

When it comes to obtaining a mortgage loan, an individual has many more options than he may have thought of. There is the conventional bank loan where most people go to find the money for their purchases and then there is the less known promissory note buyer. This type of investment strays from the traditional in that both buyer and seller can basically create their own investment deal outside of the stringent requirements that are evident in the banking industry today. Mortgages come in all different shapes and sizes and you will probably need a convenient note buyers guide to help you to fully understand each type and how they work; this will help you to decide on the right investment tool for you. Searching online can give you lots of information and could be very beneficial for those new to note buying. Still, if you are thinking about buying a private note, then here are a few basic things to get you started:

Seller Financing

This type of financing is popular with real estate note buyers and is very common among investors. When a particular seller agrees to lend a purchaser the necessary funds to purchase a home, this amount could include the total purchase price or the amount owed after a down payment has been made. In this type of loan, the principle and interest payments are structured to be amortized over a period of time that could range anywhere from 5 to 30 years. Usually with a 5-year loan, the borrower is expected to make a substantial balloon payment to cover the remaining balance. The thought here is that the borrower will be able to secure conventional financing from an institution or another lender at the end of the term. If for some reason the borrower is not able to meet that final payment or defaults on his payments before the final payment is due, the investor can foreclose on the sale and acquire the property for himself.

These types of loans are very popular for those who are unable to secure traditional loans from an institution; self-employed, retirees, or those with a negative credit rating are more likely to take advantage of this type of loan.

Private Mortgage Loans

Another avenue that many investors use are the private mortgages; these are created with private lenders that lend money at above-market interest rates. In these types of loans, the property is generally held as a collateral in case the purchaser defaults at any time. Generally, those that avail themselves of these private note buyers, such as Texas note buyers are those that may be considered at high risk for the traditional financial institution. If you choose to take advantage of this type of investment, it is important to carefully select your investment option; you’ll want to be sure that the borrower is capable of repaying the loan and that the property’s condition is in line with the current property value. If for any reason, the note buyer has to foreclose, you will want to make sure that you have a means of recouping your investment.

Another reason why this type of loan is so popular has to do with their higher than average interest rates. This makes them very attractive investments to hold onto; however, that does not mean that they can’t be sold off to a third party if there is ever a need for immediate cash.

Time Value of Money

It is important to take into consideration the idea of “time value of money”, since this controls how much you would be able to invest. When you, the seller, are ready to sell your note to a third party the price you sell it for is determined not by the outstanding balance on the loan but on the current value of the property itself. Factors have to be figured in the equation such as property condition, borrower’s financial status, and the outstanding balance among other things. The formula for determining the price of a note can be rather complicated, but there are many resources online to help you figure it out.

Real estate note buyers are a unique group of people that know how to take risks and make money from it. They are savvy investors who can tailor make a financial package for anyone that may need it. In light of the way that the economy is changing, it is only realistic that the way people buy property changes with it. Taking the time to learn all about investing in promissory notes can make a major difference in your real estate portfolio and certainly represents a major increase in your profit potential.