Why Sell Your Real Estate Note
If you are thinking of selling your real estate note for a lump sum of cash now versus monthly payments in the future you are not alone. Many real estate note holders consider selling at one time or another.
Real Estate Note owners have a variety of reasons for selling their notes. These may include the following:
- Help finance a mortgage on a new home, vacation property, boat, car or investment property.
- Owner may be retiring and needs additional money to pursue other interests or endeavors.
- Help finance a family member’s education.
- Investment opportunity which requires a large sum of money to pursue.
- Eliminate the responsibility and risks of collecting monthly payments, not to mention the accounting and reporting (IRS) headaches.
- Pay off high interest loans and debts.
- Never really wanted the note in the first place but had to accept it in order to sell their property.
- Personal family tragedy such as a death or divorce.
- Monthly payments are not being effectively used and are “wasted” on non-essentials like entertainment and eating out. Most people give little thought to spending a lot of “small” amounts here and there, however, a large sum of money resulting from the sale of a note would make most people pause and think of using this money to make wise investments.
Owning a real estate note has many aspects such as collection of payments, bookkeeping and annual reporting requirements. The owner of a note must weigh the pros and cons of servicing the note and their ability to effectively carry out these requirements while enjoying the obvious benefit of receiving monthly payments.
So what are these cons? Risks in keeping your notes include:
- Late Payments
- Missed Payments
- Inflation
- Unpaid Property Taxes
- Loss of Hazard Insurance Coverage
- Unexpected Liens Placed on the Property
- Default Potential
- Accounting Headaches
- Bankruptcy Issues
- Interrupted Cash Flow
- IRS and other regulatory agency regulations
In light of the inherent risks listed above the owner of a real estate note may be better off to sell their note and receive a lump sum of cash and let an institutional investment company specifically setup to handle these issues deal with the potential draw backs of owning a note.
NoteCom, Inc. specializes in the purchase of owner-financed, privately held, real estate notes. NoteCom purchases all types of first lien real estate secured notes. NoteCom is a direct buyer of real estate notes thus eliminating costly broker fees and allowing you to receive the maximum cash offer for privately held real estate notes. With over 20 years of experience in the private note industry, our experienced staff of experts is available to provide you with a quick quote and makes it easy for you to get the most for your note.
After the sale of your note, NoteCom, Inc. assumes the responsibility for servicing the note freeing you from any further obligation of payment collection. Our professional Mortgage Loan Servicing Company will continue to accommodate the borrower’s needs and will provide all the benefits of a full-service loan servicing company.
If you have any questions, we would be glad to help you at NoteCom Inc
