I am interested in private mortgage lending and I have a question for the pros. If after closing you decide to sell your mortgage, how do you make money if it’s sold at face value? My understanding is mortgages are bought at or below face value. Thanks in advance.
If you are looking to become a private money lender yourself give me a call or email me. There are many options.
Yes, I do plan on becoming a private lender. I will be in contact. Thanks.
Once you get going, you can email me as well. I will have business for you depending on how you lend and where.
How do you make money when you sell the note.
Well as a private lender typically you charge a few points up front. Plus you are getting payments that are primarily interest only at the beginning of the loan.
So the balance of the loan amount hasn’t gone down much at all. So when you sell at a discount, you have gotten all the payments you have received up front, plus any points you charged up front.
Most of the time when I do private loans, it is for such a short term that I won’t be able to sell the note. If I am selling a property on seller financing, that is a different story. No money really out of pocket.
Thanks for the reply. Yes, I’m aware that you would make money on the interest over the long haul, but I was referring to when an investor sells the note right after closing. I figured it would be on points charged. What is the typical amount of points charged for private loans?