Note Brokers and note buyers buy notes, mortgages and other types of cash flows for a lump sum of cash. Because cash now is worth more than a series of small payments, the note broker will buy that cash flow for a discount from the face value of the note. For example, you might give $36, 000 cash today to a note holder for her $40,000 note that has 240 monthly payments. Then you would receive 240 monthly payments.
Our job is to find the holder of a note and then offer him or her a lump sum of money to assign that cash flow to us. Within that job there are many complications, investments opportunities, possibilities for profit and for a challenging and exciting career!
You can enter the note buying business in several different ways:
1). By learning how to buy notes from brokers. With a little training you can become a passive, yet knowledgeable investor in deeds of trust secured by real estate. You will be able to get higher and safer yields than most we think ALL other investors.
2). By finding investors and note sellers you can earn a finder’s fee for referring them to note brokers or note sellers. In other words, by actively looking for people who would like to invest at least part of their portfolio in notes secured by real estate, and then referring them to a note broker, you can earn a finder’s fee.
3). By locating private party note holders to see if they would like a lump sum of cash for their notes. You can then refer them to a friendly note broker who will pay you for your efforts.
4). By developing a list of corporate institutional investor you can sell them notes you find. They will generally so all the paper work and will pay you a commission. In most states you do not need license to do this.
5). You can find and buy notes for your own portfolio, sell them to private investors, reschedule them for greater profits, keep part of the note and sell part or manipulate the note in several ways to increase profits. This is the heart of the business. You will make a profit when you buy, when you broker, when you sell the notes and when you collect the payments for your future financial independence.
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Disclaimer
The information provided in this article is for general educational and informational purposes only and does not constitute legal, financial, investment, tax, or professional advice. Note Servicing Center, Inc. is a licensed loan servicer and does not provide legal counsel, investment recommendations, or financial planning services. Reading this content does not create an attorney-client, fiduciary, or advisory relationship of any kind. Nothing in this article constitutes an offer to sell, a solicitation of an offer to buy, or a recommendation regarding any security, promissory note, mortgage note, fractional interest, or other investment product. Any references to notes, yields, returns, or investment structures are illustrative and educational only. Past performance is not indicative of future results, and all investments involve risk, including the potential loss of principal. Note investing, real estate transactions, and lending activities are subject to federal, state, and local laws that vary by jurisdiction and change over time. Before making any decision based on the information in this article, you should consult with a qualified attorney, licensed financial advisor, certified public accountant, or other appropriate professional who can evaluate your specific circumstances. Some articles on this site include hypothetical stories, examples, and scenarios created to illustrate concepts and demonstrate the types of situations Note Servicing Center, Inc. handles. Any names, companies, properties, and circumstances in these examples are fictitious or have been anonymized to protect confidentiality, and any resemblance to actual persons or entities is coincidental. These examples do not describe specific clients and do not guarantee any particular outcome. Some content may be created with the assistance of generative AI tools and may contain errors or omissions. While we make reasonable efforts to ensure the accuracy of the information presented, Note Servicing Center, Inc. makes no warranties or representations regarding the completeness, accuracy, or current applicability of any content. We disclaim all liability for actions taken or not taken in reliance on this article.