Are you having issues when trying to sell a real estate note?
Then this blog post is for you.
When investing in any real estate note, we look at 5 primary factors… the borrower’s performance on his financial obligations, the type of property, the equity position of the borrower, the amount of time the loan has been in place and the terms of the loan.
First, we look at we look at how the borrower has performed on his financial obligations. Is he making his mortgage payments to you on time? We will pull a “soft” credit report to see if he is paying his other creditors on time.
In any real estate note purchase we are trying to determine if the payer will be able to make the real estate note payments on time. In general, the better the financial performance of the payers, the less risk will have to absorb and the more money we can pay. If the borrower has weak credit, the more risk we would absorb and the less the less money we can pay. If we have really bad credit, we would look at buying a portion of the mortgage note and then later buy more of the real estate note as we have more experience with the payer.
As you look to sell a real estate note, it is important to understand which mortgage notes are the most desirable.
The answer is… what type of property is securing the real estate note? The most desirable real estate note is one that’s on the payer’s home. Because even if the borrower has good credit, he can lose a job, lose a wife/family or develop a major health problem… leaving him with not enough money to pay all his bills. In that case, most borrowers will make sure that they make their house payment…. and not make payments on mortgage notes secured by other types of property.
The next most desirable real estate notes are on investor properties with 1-4 residential units, then commercial mortgages, mortgages on land and business notes.
The value of your property is critical when you want to sell a real estate note. In some cases, an issue occurs when the property appraisal comes in with a lower value than what is owed on the loan. If that happens, we will look to buy a part of the note.
Next we look at the terms of the loan. Perhaps you want to sell a real estate note which has a balloon payment in one or two years. We would assess the borrower’s ability to make the balloon payment on time. If the payer doesn’t have a plan to make the balloon payment, we will look at modifying the loan by extending the current payment amount and removing the balloon.
In summary, we are problem solvers. We buy many notes which other note buyers can’t buy… by developing creative solutions to overcoming problems. If you are running into issues when you are trying to sell a real estate note, please give us an opportunity to get you your funds quickly. You will not be disappointed.
Find out what other note holders have said about dealing with us here. Or, you can check out our company philosophy and guarantee to you… by clicking here.
If you have any questions or concerns, please call us at 772-232-2383 and we will help you in any way that we can. Or if you want to sell a real estate note now… you may fill out this form.
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