private mortgage notes l Newland Note Investors

April 14, 2018 By Noter2

How to Sell Private Mortgage Note Easily

Searching for mortgage buyers is not very difficult.

The short answer is get in touch with us at Newland Note Investors and tell us what you are looking for. The long answer, you could find mortgage buyers even online when ready to put the time and have the expertise to find a good one. There are always cash flow note buyers, and trust deed buyers. It will help you too if you ask your real estate adviser if they know any private mortgage buyers that will be interested with yours. Ask a real estate lawyer as well because they deal in creating private mortgages and in selling them. Search for articles and blog site online.

Effective ways to Sell Private Mortgage Note

You could do that by going searching through article categories online like the real estate category, finance category and go through the sub categories. Read these article to enrich your knowledge and awareness of the private mortgage sales. An easy way to go searching for buyers of your private mortgage note is using online search engine to sell it smoothly.

Use the Search Engine

Use Google, type in the phrase “sell mortgage note”, then go through those results and read the best content that looks much closer to what you need to know. You could use different search phrases like trust deed buyers, mortgage buyers, cash flow note buyers and read each of their contents on the pages. Take down notes as you go on and reading things that you will run into some of the same web sites, make sure to write down the sites you like, take the url from the browser and save it so you can go back to them when you are done going through a several websites and call them up and ask them question on how to process the sale of a private mortgage note.

Contact a local Real Estate lawyer to Help You

Some will say that to contact a local real estate lawyer, the same one that drew up the mortgage note, and ask him or her what is the best way to sell your mortgage note. It is a big possibility that they will be able to give you enough information on the issue. However, if they might not be able to is because they did not do your mortgage note in the first place. If this is the case, ask them for a referral. Try to contact at least three lawyers for information and follow the other tips that were mentioned here and you should have a good idea on the best way to sell your mortgage note.

How to sell your private mortgage note

Get in touch with your real estate adviser and ask them for help if they know how to sell your private mortgage note or if they can recommend someone to help you out and sell fast. Newland Note Investors is specialized in Buying and Selling private notes when you need expert advise and competitive pricing for your private mortgages you want to sell, so get in touch with us.

March 4, 2015 By Noter2

5 Reasons Owners Offer Seller Financing

Why would a seller allow a buyer to make payments over time for the purchase of property?

Wouldn’t the seller rather get paid now and require the buyer to obtain a bank loan?

Here are 5 reasons property owners offer seller financing:

1. Reduced Marketing Times

What is the first thing a real estate agent does when property is not moving and has been on the market for 60 to 90 days? They reduce the price and add the tagline “price reduced” to all advertising and signs. Rather than reduce the price, it might be beneficial for the seller to offer financing. Buyers provided with financing can certainly pay full price in exchange for the many benefits they receive with owner financing, including the money they save by not paying expensive loan fees, origination fees, and points.

2. Increased Inventory of Prospective Purchasers

By offering owner financing, the seller increases marketability with a wider group of available purchasers. Statistics show that almost 40 percent of the American population is unable to qualify for traditional bank financing. While not all of the “unqualified” group would be an acceptable risk for owner financing, it still widens the market of prospective buyers considerably. Anyone who has added the words “Owner Will Finance” or “Easy Terms” to a For Sale ad or Multiple Listing Service (MLS) listing knows the phone will ring off the hook with interested prospects.

3. Reduced Closing Times

Another advantage of offering owner financing is substantially lower closing times. A closing involving a third-party conventional lender can take six to eight weeks while closing a seller-financed transaction through a reputable title company can take as little as two to three weeks. This is due to the reduced paperwork and less restrictive due diligence process.

4. Investment Strategy for Hard to Finance Properties

There are many properties that encounter financing difficulties including mixed use property, land, mobile and land, non-conforming, low value, and others. Investors realize excellent returns by paying a reduced cash or wholesale price on a hard-to-finance property and then reselling at a higher retail price with easy financing terms.

5. Interest Income

Why let the banks earn all the interest? Sellers can keep the property-earning income even after they sell by offering owner financing. For example, a $100,000 mortgage at 9 percent with monthly payments of $804.62 will pay back $289,663.20 over 30 years. That additional $189,663.20 (over the $100,000 mortgage) is power of interest income!

Work with Owner Financing Specialists

If considering seller financing, be sure to consult with a qualified professional to properly document the transaction.

It also helps to speak with note investors to gain insight on appealing terms and structuring techniques. This assures top-dollar pricing should you ever want to convert the payments to cash by assigning your note, mortgage, deed of trust, or contract to an investor.

March 3, 2015 By Noter2

Seller Financed Notes and Interest Rates

The interest rate a seller agrees to accept when providing owner financing to the buyer has a large impact on the note’s value. Unfortunately, many sellers overlook this important decision.

Why Private Mortgage Note Interest Rates Matter

Inflation Fighter

Each year it seems the cost to buy the basics just keeps going up. It’s not your imagination; it’s inflation.

In fact in July 2008 that inflation rate was 5.6 percent higher than in July 2007 (based on the Consumer Price Index reported by the U.S. Department of Labor on August 14, 2008). Worse yet, some basic items like energy increased 29.3% over that same time frame.

So what does inflation have to do with seller-financed notes? Well a seller would need to at least charge an interest rate equivalent to the inflation rate just to break even!

Return on Investment

Rather than just breaking even, a seller desires a return on their investment. By accepting an IOU or payments from the buyer that money is tied up. Plus, once the property is sold the new owner will be the one to directly benefit from any increase in property value.

The seller is now acting as the bank and should expect a return at least equivalent to the interest rate a bank is charging for a similar loan. The seller does not have the protection of private mortgage insurance that many banks require adding another level of risk that should be rewarded by an increased rate.

Since the buyer is saving the costs a traditional bank might charge for a loan (points, underwriting fees, origination fees, etc.) it is reasonable to expect them to pay an interest rate above what a bank would charge. On average, it is recommended that a seller financed note carry an interest rate of 2-4% higher than bank rates to compensate for these matters.

Improves Resale Value to Note Buyers

If a note holder ever desires to sell their future note payments for a lump sum of cash, they will quickly realize how important the note interest rate is to investors.

While investors look to a variety of factors to determine their pricing, all things being equal, a higher interest rate results in a higher purchase price from a note investor.

For example, a seller holds a note with a balance of $100,000 with monthly payments of $1,110.21. If the note rate is 6% and the investor wants a 9% yield then the offer would be $87,641. Now if the note rate were 4% the offer would decrease to $81,623, but if the note rate were 8% the offer would increase to $95,274.

For simplicity of comparison, these examples assume the monthly payment amount remains the same and there are acceptable credit, equity, and documentation. But you get the idea, the higher the interest rate the more valuable the note.

There Are No Take-Backs!

The time to give serious consideration to the note interest rate is at the time of creation. There are no take-backs or do-overs. The rate you agree to accept at closing stays the interest rate for the life of the note. The only way to change it later is to get the buyer to agree and execute a formal note modification. It’s highly unlikely a buyer or note payer is going to agree to have their interest rate increased at a later date (unless there is some advantage to them).

Be sure to give the amount of interest charged on a seller financed note serious thought. It will affect the value of your note not only today, but also far into the future.