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What is a Note Broker and Why Should You Use One? The Wrong Choice can Cost You Thousands!


What is a Note Broker and Why Should You Use One? The Wrong Choice can Cost You Thousands!

The real estate boom

When the real estate market was booming, so were the late night TV infomercials selling courses that would show you how to make a fortune brokering mortgage notes. Since that time, a few of those course givers are in jail and lots of the so-called brokers they produced have left the business since it’s not “millions for nothin’ ” as they were led to believe.

The result is that legitimate, professional, serious brokers have had their profession and, indirectly, themselves tarnished. The further result is that many note holders sold their notes through these fly-by-night brokers and lost tons of money. And others were scared off when they really needed to raise cash and then either couldn’t or had to take on debt.

The professional broker

So what is a broker for and why should you consider using one? The professional broker is the eyes and ears for the note buyer industry. They get close to the seller and the property and build trust in the seller. There are millions of people who hold mortgage notes worth hundreds of billions of dollars at any given time in the US market. There are in comparison, very few note investors, institutional and private, for that volume of notes.

So the broker screens the potential sellers and creates investment packages that the note investor can work with. In this present economy, it is definitely a buyers market. There are tons of notes, many good ones, and the buyers can really cherry pick.

The first thing a true professional will do is to ask you why you want to sell. If you are holding a note on good property that is paying you 6-8% per year, especially in this market, that’s a good question. When you tell them why, they will ask you how much you really need to do what ever it is. They will then begin to create a so-called “partial” sales offer.

They will then ask you detailed questions about the property and the note itself to include the current value, the interest rate, monthly payments, whether there is a balloon payment due and when, length remaining and so on. They will also ask if you have the buyer’s credit score and how old it is; they will also ask if all payments have been made on time up-to-date. These are all legitimate questions that the eventual buyer of the note will require answers to.

The result will be an offer to buy a pre-determined number of monthly payments in return for the amount of money you want. You receive the funds and the note investor begins to receive the monthly payments you normally got. When the pre-determined number of months is up, the monthly payments revert to you.

This infusion of cash along the way can actually result in you getting more than the full value of the note by the time it is paid off.

Seller Beware

Although this is the reverse of the old adage, remember, you are thinking about selling a portion of a valuable asset. Be wise, be careful and find a professional. And never pay for any of this up front. When you have successfully sold what you want to sell, the note broker will be paid by the note investor, not by you.

We work with the best note buyers in the business, people who work for Win-Win solutions to the note sale transaction.

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Tom Dewell spent over 30 years in various sales, marketing and management positions in start up companies, mid-size corporations and international groups.

He began his new career in note brokerage and alternative commercial finance in 2005 and has since dealt with many mortgage note holders of both residential and commercial properties representing values from under 0,000 up to .5 million. He has seen the dramatic change the industry has gone through in the last few years and knows that in our present economic situation the need for professional solutions for people wanting to sell notes is greater than ever before.

Working with some of the best note buyers and investors in the country has given him the knowledge and resources to work for successful solutions to any note sellers needs.

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