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    Palani Wright
    Post count: 24

    Has anyone ever sold the note before?

    Let say that your having a tough time selling a certain property for cash but you sell a property under contract (terms)…package up that deal and sell the note to get your cash price .

    Ex: Your trying to sell the property for $5k cash but your only getting interested people at $8k on terms.Once the property is under contract, sell this particular property at the terms price than sell the contract to a investor to get your $5k cash price.

    Has anyone ever done this? If so, What are the pros & cons to this?

Viewing 4 replies - 1 through 4 (of 4 total)
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  • Kevin Farrell
    Post count: 1637

    Palani – I have not sold any notes. If I did I would contact a couple of companies that do that and I would make sure that my terms contract meets their requirements to the letter. I would also make sure I know how much they discount the note when buying it.

    When I have a stubborn seller like this I sell it on terms (reluctantly). I always have a handful of deals on terms. The monthly cash flow pays all of my overhead costs. That way I am not dipping into my operating funds even if I have no sales that month.

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    Palani Wright
    Post count: 24

    Hey Kevin,
    Thanks for that info. Currently that’s what we are doing…using the monthly payments to pay for the expenses…Just a thought because I have a few coworkers (at the day job) who here about the profits in the business & would like to get involved. I thought this might be a way for them to invest…they get a healthy return & I get my cash price to buy more property.
    Jut a thought.

    Trevor Probandt
    Post count: 151

    YES!!!! People do this all day every single day! Every time you build a note on a parcel, be that a house, lot, car, cell phone, etc. You have TWO assets, the note or “paper” and the hard asset. Do you think that your lender kept your mortgage on your single family home??? Hell NO!!!!

    The difference here? You usually have no credit checks and an asset that has a high default rate and is very non-liquid. Which is great and terrible, depending on how you look at it.

    So, how are you willing to deal with your buyer’s investors? Are you willing to sell partials? Do you want to sell the whole note? Are you willing to service the note? Guarantee payment? Simply sell them the note and property? There is an infinite number of ways to cut this cake. That is what makes it fun!!!

    As for your numbers…you normally need to discount your properties, especially with raw land and no background check buyers. Will you??? Maybe, maybe not! How good of a salesman are you and what kind of returns are your investors looking for?

    Palani Wright
    Post count: 24

    EXACTLY Trevor!!! YES!

    Example: I want $10k for a property but can get $15 on payments (totally doable) I sell the note “contract” to a investor for $10k with the payments being serviced by a company & guarantee payment of at least 6 months or we will find another buyer for free. After the six months is up and if the buyer defaults we will charge a minimal fee to list it & find a home for that loan again.

    This idea came from co workers who keep asking what my partner & I do,(who also works with me) and can we teach them. This would be my solution for them!

    With this being a new idea to me, I was curious if anyone in this group uses special paperwork, their verbiage & what they promise customers who buy notes.

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