Mortgage Note Buyers and Sellers, Loan Servicing, and Hard Money Lenders

What is My Real Estate Note Worth?

The most common phrase we get when customers dial 512.464.1214 is: ” I have a real estate note I want to sell, what is it worth? ” If you are receiving monthly payments from sold property, the quickest way for me to answer that question and provide you with an accurate quote is to get a copy of the following documents:

  • The Real Estate Note
  • Deed of Trust
  • Settlement Statement (if there is one)
  • Story Behind the Payor (Husband and wife with kids, both work)
  • Payor’s SS# if you have them

Our FAX # (512) 464-1214 or Email Me the docs

 

Other documents that you will want to begin to put together are:

The Texas Note Company

  • 12 months of payment history (bank statement or cancelled checks)
  • Lender’s Title Policy
  • Property Hazard Insurance
  • Pictures of the property
  • Property Tax Status

 

Here is an ARTICE that discusses the paperwork involved.

 

While we are putting your quote together be thinking about how much cash you need.  Be open to a partial offer.  The pool of buyers is larger and the discount is not as great and  after a certain period of time you will get the note back with a remaining balance.  Most partials offer more for you money.

 

The real estate note market is driven by investor’s requirement for Return on Investment (ROI) and the amount of risk they are will to take with their money. Most investor’s require a ROI that is 10% and above, meaning in order to achieve that rate they will purchase the note at a discount of the balance.

 

The discount you receive depends on many different factors, but ultimately your discount was established when you created the note.  That is why it is so important to have a note professional, like The Texas Note Company, to consult with you when you create a note.

What is the Standard Discount in the secondary note market? There is no Standard Discount. Often note sellers will call The Texas Note Company and ask “What is the standard discount when you sell a note like mine?” There are several different variables that go into determining what the note is worth, type of property, interest rate on note, payment history, financial ability of the payor, where the property is located, amount equity in the note, and about 100 other variables. Each note has its own flavor and fingerprint, and likewise each investor has his/her own risk tolerance and flavor of notes.

 

Property sellers who use owner financing to sell their property often don’t understand the dynamics of the secondary note market, that goes for real estate agents, attorneys, CPAs and other professionals as well. They will often create a note that can be very difficult to sell and get the cash needed out of the transaction, they did not create a note will the investor in mind.

Here are 10 Things to think about when creating a note:

  • Down Payment
  • Interest Rate
  • The Term of The Note
  • Credit Worthiness of the buyer
  • Record Keeping
  • Note Accounting
  • Balloon Notes or Hold To Term Notes
  • Clauses to include on the Promissory Note
  • Items that need to be on the note
  • Real Estate Professional Services

Contact The Texas Note Company for further information on how to create a note with investor in mind.

 

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