Are You Ready to Sell that Note?[Please note: in most cases we are acting as a note broker and not as a principal.]
Did you take back a note in order to sell your home or business interest? But, you need cash NOW, like yesterday! Whatever the reason for your need of cash, we can help.
Let’s begin by answering a few questions.
What Is A Note?
A note is an IOU. Someone,THE PAYOR, has promised to pay a certain amount of money to someone else, THE BENEFICIARY. The note will have TERMS that show the interest to be paid, the payments, how often the payments will be made, etc.
What kind of notes do you buy?
Our primary focus is on single family, owner occupied, residential type properties. That is not to say that we will not consider other notes such as un-developed land, business notes, judgements, inheritances, lotteries, apartments or commercial buildings, just to name a few.
How Much Is My Note Worth?
That depends. There are many important factors that determine the value of a note. Such as: the current value of the asset securing the note, the interest rate on the note, the age of the note, payment history of the note, the credit worthiness of the payor,…just to name a few. Typically, higher the risk, the lower the note value. In some cases, the risk is too high to justify purchasing it.
What do you look for in a note?
A note that has been newly-created, where there is no discernable payment history established, creates an aura of uncertainty and risk. Most investors like to see “seasoned” payments, meaning there is an established payment history. The payor, the one paying the note, must have decent credit. With lesser-credit payors, you can expect a deeper discount off the price of the note. An investor likes to see stable employment from the payor. Going from job to job over a short period of time creates extra risk for the investor. Also a nice downpayment of a buyer’s/payor’s hard earned money creates more stability for a potential buyer/investor. The payor will often fight, claw and scratch their way out of a problem before jeopardizing their intial down payment they have made into a property. Loan to Value (LTV) is another important aspect of the note. LTV’s with 90% or more, create a greater risk for the investor, thus a deeper discount off the purchase price.
What documents will I need if I decide to sell?
We will initially need to examine copies of the following documents. At closing, we will need the originals.
- 1. Signed promissory note.
- 2. Recorded mortgage/trust deed.
- 3. Closing statement on transaction creating this note.
- 4. Information on the borrowers/payors.
There are many variables that go into purchasing a note and it is almost impossible to cover all of them on this page. If you need $$CASH$$, and need it quickly, just give us a call at 252-257-4822 and we will let you know what information we will need in order to give you a quote.
Give us a call today! You’ll be glad you did. The check just might be in the mail!!!