Anyone currently brokering notes? How is that going and how much are you typically making a month doing this?
:cool YES and it is just like any thing else in real estate we have are good days and months and our down
I belive our down days and months are because most people think it is hard to make a owner finance note and get it sold !!! IT really is not this hard to do we have as i have posted before been doing it for over 5 years now and it really is very easy to do as well as sell even a new note
BUT we make from 5 k up to our best monthe was over 20 k :shocked
I do too (it’s a natural extension on what I do)…
In my case, there are chances for me to double and triple dip when I:
a. Assist in orginating seller notes.
b. Purchase Seller notes (or arrange the purchase of the same).
c. Sell the securtized pool to Wall Street.
As the other poster indicated, this niche is no free ride—it’s competitive, it’s saturated and there are many, many established players that already have it down to a science.
Regards,
Scott Miller
Where are you guys finding buyers to sell them too?
Rich,
I am working on my first note selling deal right now. real estate 001 can help with selling the note and you can google note buyers. I have found note buyers are just like lenders. Each noter buyer has different requirements. Each one of them has particular things they are looking for in a note. Its critical you understand what is needed in a note in order to be able to sell it. You just have to call enough of them in order to find one that fits your market and abilities.
Some note buyers don’t require seasoning on the note, some will. Some want appraisals done, but some only care about the sale price that you sold it for. But almost all require that the person you seller financed too has at least a 600 credit score, and at the very least 5% down, most want 10%+ down. Then you will only receive 75-80% of what the note.
Example:
- Buy a property at $50,000
- Sell it for $100,000 using seller financing with $5,000 down.
- Sell the note for $75,000
- Profit is $25,000 - your costs in purchasing the property and holding costs.
Sounds easy, but how easy is it in CT to find a property for half of what it is worth, or to find someone that can put 5-10% down. I think the best way to buy is to get a rehab property. Buy a place for $40,000 that needs $10,000-15,000, that would sell for $100,000. The key is finding a good enough deal to start with.
:cool first thank you iron for the word :biggrin HOW are things working out ?
WE have a contract with a company that buys our notes and the thing is yes they must must have at least 5% down it just gives as they say the note buyer a warm fuzzy the person paying the note will not run out to fast as they have some funds in the deal up and front
AND yes i can and will help any one looking to sell notes and to get into the making and selling of the same
WITH OUT some one to help you into this part of real estate it can be a real hard shell to crack and do any good in
AND hey iron i sent you pm take a look and see /// talk soon
real estate 001,
Things are going good. I find out tomorrow on all of the bids I put in. I think you were right when you said the key is to try and make money on many deals, and not to try and make one big killing on just one deal.
I’m currently working with a note broker to sell a note I am creating with a seller on a deal. Basically I needed $50k to close the deal that I am taking sub2 (she wanted cash and wouldn’t take a note) so I found someone that will buy the note. While I am working through this I am wondering, why they hell can’t I do what she does and advertise to buy notes and broker them out? Maybe earn a little cash on the side. And of course this will also teach me something about the brokering business so I can sell my own notes to them later on as I create them to sell properties to people.
If I understand you correctly, you are discussing being a note wholesaler? The only reason you may not find much success in what you said is because there a ton of people trying to that. Advertise that you buy notes then basically wholesale the note to a note buyer. Like wholesaling, the money is in the rehab and not so much in actually being a wholesaler.
I could be wrong but I would rather buy a place, sell it, then sell the note to a note broker. Rather than trying to be a note wholesaler. But it could be a good way to make a small amount of money.
Just my two cents.
:cool YES this is true this is as i have said a very hard business to get in to to make money !! TO give you a lokk at our doings our fist year we were thinking no way iam not going to do this at all as the dark was very dark !!!
BUT we had no one to help us it was truley a hit and miss thing but we made it for 5 years now
RICH are you talking about getting into brokering and making your own notes ??
IF so i can and will help you along the way with this !! BUT you must see that you will be making a little on one deal and alot on another
AS well when you get to the point of making and brokering your own notes this is when the real fun is as you get a pay check two ways but it takes time to get there
I AM looking at makeing a program where by you can work with realtors and help them sell more homes ////and make a fee for putting a owner finance note in place for the sellers and buyers ////as well be able to pay a finders fee to a realtor for bringing the deal to me
BUT this is some where down the road /// soon i hope as we all know or should the key to a real estate deal is the finance :biggrin
I have a property. I will close the beginning of next month. But here is my question on the note buyers criteria.
When I sell my property to someone using seller financing, the note buyers want me to get:
- 5-10% down
- credit score of 600+
- 9%+ interest rate
- credit report
So why would anyone seller finance through me if they have to give me 5% down, pay 9% and have good credit?
:cool hello iron
good to hear how things are going !!
LET me try and clear the air on your questions here fo you 5 - 10 % down is so as i have said the note buyer has warm fuzzys as the buyer has some money in the deal and is not as quick to run away when things get tight for him
the 600 + no this should be 600 - as any one with above 600 can more than likely go to the loan /bank unless there income to debt is high and then the banks get a little shy !! WHAT you are selling to is people whom can not get financing any other way basicly
SO good credit is for the banks and loan compines unless as i said above y they have the high income to debt
CREDIT report is up to you if you want to run it the folks we deal with as a whole do not care about it as they have a paper work that if the buyer screws it all off they have a sellable property
THE thing to keep in mind with owner finance and note sales is keep it all simple ( KISS) AS THE MORE YOU TRY TO PUT IN A CONTRACT AND THE MORE YOU TRY TO READ INTO THE WHOLE DEAL THWE MORE CONFUSED WE ALL GET
HOPE to hear from you soon on things
real estate 001,
I appologize, but I’m not connecting the dots here. If I require 5% down, 600 credit score and a 9% interest rate inorder for someone to buy the note. What benefit is it for the buyer of the property to do seller financing through me?
From your post it sounds like the ONLY benefit is that I won’t check their debt to income ratio. Are there any other benefits for them to go through me?
Thanks for the information. I don’t want to end up being stuck with a note that I do not want.
:cool the big big benfit is this the bank will not approve your buyer and neither will any loan company for any reason /// you are selling to c and d credit people as they can not gey any loan any other way .
AND these are the people who are below 600 fico /// and you do not even know there fico unless you run a credit check
WHEN you have a buyer come to you you can ask them can you get bank or any other type of finance for this buy ?? IF they answer no then you can give them the best benfit of all home ownership when no one else could !!
KEEP IN MIND YOU ARE SELLING TO C AND D CREDIT WITH OWNER FINANCE THEY CAN NOT BUY A HOME ANY OTHER WAY THIS IS THE BIG BENFIT :biggrin
Your note buyers will want a credit check or something won’t they? Can you give a list of what your note buyers want?
- credit score has to be ____.
- employment info
- down pmt has to be 5%
- etc.
In this type of format. I need to know what is needed in a buyer of my property. Thanks for info!
:cool okay here we go
-
down must be at least 5 %
-
buyer any fico any
-
buyer working ?? HAVE TO BE
-
buyers pay history if not a new note
-
note buyer will decide if he wants a credit check on the buyer
-
all other note paperwork would be the normal stuff
a) the note it self // 1 st or 2nd b) security instrument c) closing statement d) bill of sale e) insurance f ) terms in months g) payment amount
h) intrerest i ) owner occuipied j) residenntial // commercial//vacant land k ) any prior mortgage info ( if any )
this help yopu out and clear up the clouds any ?
You can greatly increase your purchase options by using notes.
Use the paper As a Down Payment to Purchase Real Estate
You, the buyer, might give the seller a note for $10,000 secured by a mortgage on the real estate you are purchasing from him /her. The seller could then use the note at its full face value to purchase another property.
Many sellers of property are glad to receive paper that is secured by real estate other than the property they are selling. The seller to whom you are giving the note will find it easier to use that note as a down payment than they might suspect. Once the new property is acquired, the seller could then use any number of ways to take cash out of the equity in the new property.
Sell the Income From the Note
Most people are aware that when they receive a note, they have an asset in the amount of the note. What most people do not realize is that they really have no asset; they have the note itself and also the cash flow that is coming each month or year from that note.
Assume that you gave the seller a $12,000 promissory note bearing interest at 10%, payable $1,200 per year. That $1,200 per year income that the seller is receiving could be sold at a discount or, for that matter, the seller could sell several years of income at a discount to generate cash. This technique would leave the primary asset, the $12,000 note, untouched.
The concepts presented above demonstrate a few of the numerous ways notes can be used to help you purchase property with little or no money down. Listen carefully to the seller and use you creativity to develop methods of using notes to complete your own purchases.
Luiz