Real estate Notes: Full versus a partial note sale...

Receiving payments on a real estate note?

Thinking about selling your note to a note buyer?

Most note sellers would rather (if they could) sell the entire note.

Not all real estate notes can be sold. Let me say that differently - Not every
real estate note will have a buyer.

There are basically 2 ways you can sell your real estate note.
(1) You can sell the full note - which mean the entire note is sold off.
This means the note seller walks away with cash from the note buyer and
the note buyer starts receiving the payments from the note payor. The note
seller is cashed out of the note, and the note seller is now out of
the deal completely.

(2) You can sell a partial payment stream of the note - which means that you
are only selling a portion of the real estate note, not the whole note.
For example, you might only sell off the next 4 years of monthly payments.

The note seller would receive cash up front, the note buyer would receive
the next 4 years of monthly payments from the note payor, and then the note
would revert back to the note seller and he would start receiving the
monthly payments again from the note payor.

Which option is better?

It just depends on the wants, needs, and figures involved in a full buy or a partial buy of the note.

Another way to describe the partial vs the full note scenario:

Let's assume you have a pizza (with 8 slices to it) and want to sell the entire pizza. If I want to buy the entire pizza from you, I will pay you for the whole pizza.

But, Let's say I only want to buy 3 slices of pizza.

Since I am only buying 3 slices of the pizza, I am only going to pay you for the 3 slices I get to eat. You get to keep the other 5 slices for your enjoyment.

Real estate notes and Pizza. Mmmm... Mmmm... Good.