Buy And: Sell Notes

If the borrower pays off the loan early (due to a sale or refinance), you receive the full $100,000 balance, handing you an immediate $20,000 "windfall" gain. 4. The Due Diligence Checklist (The "Paper" Inspection)

Eventually, that seller might want a lump sum of cash rather than small monthly payments over 30 years. This is where the note buyer steps in. They buy that stream of future payments at a , providing the seller liquidity while securing a high-yield investment for themselves. 2. Performing vs. Non-Performing Notes The market is divided into two distinct worlds:

Are you looking to notes for a commission, or are you interested in buying them for your own retirement portfolio? buy and sell notes

In physical real estate, you check the roof. In notes, you check the .

If you buy a "second" mortgage and the "first" mortgage forecloses, your investment can be wiped out completely. If the borrower pays off the loan early

The "magic" of note investing lies in the . Example: A note has a balance of $100,000 at 6% interest.

The borrower has stopped paying. These are bought at deep discounts (often 30–60 cents on the dollar). The strategy here is "workout" or "liquidation": you either help the borrower re-perform, or you foreclose and take the property for a fraction of its market value. 3. The Power of the "Discount" This is where the note buyer steps in

For performing notes, "seasoning" (a history of 12+ months of on-time payments) is gold. 5. Why Sell a Note?