Selling Business Notes
selling business notes
Need to Sell your Mortgage Note? Never, ever sell the whole note! You’ll lose big time
Who sells a note and why?
No one ever sells a good mortgage note just for the heck of it. What happens is that the desire for cash comes up and the note holder looks at the note as a source. And right they are, but there is no reason to sell all of it to get a portion of it. Why would anyone want to give up an entire investment paying 6 or 7 or 8% or more, backed by solid collateral, especially in the present market, if they don’t need to?
What if your investment portfolio or your CD account was worth several hundred thousand dollars and you needed $30,000 to repair your roof, would you sell the whole portfolio or all the CDs? I don’t think so!
Unfortunately in the note business, there are many so called brokers who think that the key to success is in maximizing their commissions instead of maximizing the needs of the note holder. This not only scares off people with legitimate needs to use their note to get cash, but also gives the business a bad name.
The professional broker
A professional note broker will first find out why you want to sell and how much you need and then, help you find the best solution to get that amount. Their job is to collect all the data necessary to provide an investor with an investment package that is both appealing to them and that satisfies the needs of the seller.
The broker will 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 and they will 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 partial sale
Once they have the tools to evaluate the note and its salability, they will work with an investor to create an offer for you 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 is referred to as a “partial sale”.
Two advantages – and what you could lose
This process has obvious advantages. Selling the whole note results in a heavy discount since the buyer assumes all the risks for the life of the note and has the time value of money working against them. The longer it takes to get their money back, the less the final payments are going to be worth due to inflation. Therefore the offers are highly discounted.
Secondly, when you agree to a “partial” sale, you don’t really lose the collateral and you will start receiving income again in the future. In fact, depending on the details of the transactions, some partial sales result in you earning more than 100% of the value of the original note!
It is these two things you stand to lose if you fall into the trap of the unprofessional broker who wants you to sell your entire note so that their commission is as high as possible.
Never pay for quotes
One last point: never pay for a quotation and never bind yourself in the early stages on your information gathering. Quotes should always be free and without obligation. The broker will get paid by the note investor, only if they do a good job, for both you and the investor.
Free, no obligation, confidential quotes are available on line. On the link below, click on the “Mortgage Notes” tab and scroll down to the quote request form links. They are available in PDF form for faxing, or you can use the online form for quicker results.
About the Author
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 $100,000 up to $2.5 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.
Do I need a business license to sell crafts or things I make from home?
Note that I live in the Metro Detroit area. Thanks!
No, I don’t think that you need one there.
|
|
QuickBooks for Mac 2012 $129.50 Easily manage your businessProductInformationQuickBooks for Mac 2012 is small business accounting that lets youorganize your finances all in once place so you can quickly find whatyou need. Easily create invoices and track your businesssales and expenses – and get reliable records for tax time. QuickBooks for Mac 2012 is set up in minutes and is easy tolearn and use along with looking a… |
|
|
QuickBooks for Mac 2012 [Download] $131.26 New to QuickBooks? Find out why QuickBooks is the #1 best selling small business accounting software1. Built for your Mac Synchronize contacts with Address Book so you never have to enter an address or phone number twice2 Add reminders to iCal so you can be reminded to print invoices and checks or to pay bills in one consolidated calendar 2 Protect important data by backing up files to MobileMe… |
|
|
QuickBooks Premier 2012 $219.99 New to QuickBooks? Find out why QuickBooks is the #1 best selling small business accounting software¹. Set up in minutes, easy to learn and use No accounting knowledge necessary Quickly import your data from a spreadsheet2 Step-by-step tutorials and industry-specific coaching tips show you how to create invoices, record expenses and more Try out sample files for you business type Special of… |
|
|
Maxxum Swiss Gear by Wenger Notebook Backpack – Blue $49.90 Swiss Gear by Wenger Maker of the Genuine Swiss Army Knife Computer Backpack: BLUE; poly/nylon/pvc; fits most 15.4″ notebooks; padded computer pocket; air-flow back padding; music player/headset port; essentials organizer; case base; shock absorber straps; phone pocket… |
|
|
Targus 15.4 Traditional PC Notebook Case – Fits Up To 15.4 Scree The bag that provides protection, functionality and organization Product Information The Targus Traditional Notebook Case is a modified version of our best selling OCN1. The fabric has been upgraded to a stylish two-tone nylon. It includes a large front pocket to accommodate folders and documents. The front zip-down workstation includes: pen loops, key clip, business card holder and phone pocket -… |
|
|
USPS PS-100 10 lb. Desk Top Postal Scale $31.50 10 LB Desk Top Postal Scale, 1.3 ” Display, Resolution 0.1 Ounce / 1 Gram, Auto Shut Off, Star 4 AC Adaptor… |
|
|
Riot $5.39 Ah, youth: the exuberance, the energy, the blistering highs and bottomless depths. It’s an ideal breeding ground for true rock & roll belief. Hence, the youngsters of Paramore unearth geysers of loud, sugary angst on Riot!, their major label debut and follow-up to 2005’s All We Know Is Falling. Small-town musicians who have played together for years, Paramore boasts the appeal of an emo-pop blast … |
|
|
Sharp YOP20HII 1MB Electronic Organizer $24.99 Keep up to date on your hectic schedule with the affordable Sharp YOP20H electronic organizer with 1 MB of memory–which will store thousands of entries. This sleek, metallic, touch-screen organizer not only keeps track of important dates and phone numbers, it helps you count calories and has a built-in pedometer. Organizer functions include schedule, telephone/address, and memo modes. The include… |
|
|
The Five Dysfunctions of a Team: A Leadership Fable (J-B Lencioni Series) $8.15 In The Five Dysfunctions of a Team Patrick Lencioni once again offers a leadership fable that is as enthralling and instructive as his first two best-selling books, The Five Temptations of a CEO and The Four Obsessions of an Extraordinary Executive. This time, he turns his keen intellect and storytelling power to the fascinating, complex world of teams. Kathryn Petersen, Decision Tech?s CEO, faces… |
|
|
Influence: Science and Practice (5th Edition) $13.98 Influence: Science and Practice is an examination of the psychology of compliance (i.e. uncovering which factors cause a person to say “yes” to another’s request). Written in a narrative style combined with scholarly research, Cialdini combines evidence from experimental work with the techniques and strategies he gathered while working as a salesperson, fundraiser, advertiser, and i… |
|
|
The Complete Guide to Selling a Business $26.24 This book is in New – Excellent condition |
|
|
Selling Is Everyone’s Business $18.71 This book is in New – Excellent condition |
|
|
Selling Your Business $24.44 This book is in Used condition |
|
|
Buying and Selling a Business for Wealth $28.45 This book is in New – Excellent condition |
|
|
Selling A California Business $9.71 This book is in New – Excellent condition |
|
|
Buying & Selling a Business $32.3 This book is in Used condition |
|
|
Buying and Selling a Business $24.71 This book is in New – Excellent condition |
|
|
Buying & Selling a Restaurant Business $14.96 This book is in New – Excellent condition |
|
|
Selling in the New World of Business $38.66 This book is in Good Used condition |
|
|
Business 2000: Selling, by Greene $13.75 This book is in New – Excellent condition |
|
|
Business 2000 : Selling $37.05 No Synopsis Available |
|
|
Module, Business 2000 Selling $546.31 No Synopsis Available |
|
|
Aie, Business 2000 Selling $52.97 No Synopsis Available |
|
|
Cases in Business to Business Relationship Selling $32.5 No Synopsis Available |
|
|
Business Notes $13.5 This book is in New – Excellent condition |
|
|
Notes from Business Meeting, Glass on Paper $129.99 Panoramic Images Notes from Business Meeting, Glass on Paper – Wall Decal |
|
|
The Complete Guide to Buying and Selling a Business $5 This book is in Used condition |
|
|
Ircd, Business 2000 Selling000 Selling $240.49 No Synopsis Available |
|
|
Bundle: Se Business 2000 Selling $100.09 No Synopsis Available |
|
|
Supplement: Selling Today & Cases in Business to Business Relationship Selling Package – Selling Tod $130.97 No Synopsis Available |
|
|
Practice Notes on Business Tenancies $60.62 No Synopsis Available |
|
|
BUSINESS STATISTICS PRELECTURE NOTES $7.02 No Synopsis Available |
|
|
Entrepreneur Magazine’s Ultimate Guide To Buying or Selling A Business $18.71 This book is in New – Excellent condition |
|
|
Package of 25 Learner Guides for Business 2000: Selling $525.18 No Synopsis Available |
|
|
Selling the Dream : Why Advertising Is Good Business $24.38 No Synopsis Available |
