Note buyer. Calling all note buyers...

I have two notes for sale and I cannot get any note buyer to call me back.

One of the notes is my grandma's. The current remaining balance on it is $2,019.

The other note is one I found on the internet and the current balance on this one is $17 million.

I would like to sell my grandma's note and broker out the sale of the big one.

Why won't anyone call me back on these two notes? What's the deal?

A: The size of the note is another important factor in pricing your real estate note.

There are big notes, small notes and average notes.

The industry average note balance is $53,000.

Once the balance on a seller financed note gets below $10,000, most note buyers will not be interested because the balance is just too low.

Any note over $1,000,000 is usually just too big for any note buyer to take on.

Obviously, there is exceptions to every rule. But, you will have a tough time finding any note buyer that will be able to buy a note that big.

Regardless of the size of the note you are trying to sell, common manners tell me that you should at least get a phone call back. Thanks for your question.

Got a note you are looking to sell? Want a quote? Curious how I would price your real estate note? Simply give me a call: (206) 438-8399

"I am a flipper. I buy the house low, fix it, and sell it quickly and carry the Note..."

Can you buy the seller financed note on these quick flip real estate deals?

Nope.

Other note buyers might be interested in the quick flip, sell the property with seller financing, and then sell the note off.

I have just never been a big fan of that type of mortgage paper. The default rate is too high for my comfort level.

Putting it another way... I am not interested in buying Notes if the Note seller owned the property for a short time prior to selling the property.

I am more concerned with the "seasoning" of the property ownership than I am of the "seasoning" of the Note.

Let's look at an example:

Ma and Pa Kettle owned the 29 acres and the mobile home that sits on the property for 12.5 years. They decide to move to Florida and sell the property. They owner finance the new buyers and create a 6% interest Note that will be payable over the next 20 years.

I would buy that Note after only 1 payment has been made. The Note "seasoning" need only be 1 month in this case. It's because the Seller/Property "seasoning" was 12.5 years.

In the case of a real estate investor/flipper: Bought the real estate 3 months ago. Fixed it and sold it with owner financing. He created a 9% Note payable over the next 20 years.

I would not be interested in buying this Note. The Seller/Property "seasoning" was just 3 months.

Owned the property for a long time before selling it on owner financing? I will pay top dollar for your mortgage note.

Owned the property a short time before selling it with owner financing? I am probably not your Note buyer.

Now, as always there are exceptions to this rule...

One would be in the case where Ma & Pa past away. The property is inherited by Elmer Jr. Elmer Jr. then quickly sells the property and carries back a Note.

Even though Elmer Jr. only owned the property a short time, I would still be happy to buy this Note because it was in the family for a long time...

Later