Note Buying and Brokering

So, I made mention of this before, and I've decided that I'll write a little about this subject for all to see, resources included. Some of the resources I've found are free and some you'll need to pay for, but here they are for you to try out, some of these took me quite a while to find.

Brokering a note involves buying the note (contract) from the note holder at a discount. Say Bob has a note on a house (mortgage) and the home owner is paying Bob, not a bank. The note is worth $200,000.00 over a 30 year term. Suddenly, Bob gets it into his head that he's going to buy a yacht, or has an accident, or needs to pay for Bob Jr.'s college. The only way he can get that kind of money fast is to sell his note, at a discount of course. Here comes Ted. Ted is a note broker. He works with a company that will give Bob $160,000.00 for his note. Ted tells Bob that they'll give Bob $155,000.00 for the note. Ted pockets the extra $5,000.00

Lots of people don't want to work with brokers because they feel it's a built in loss, and it is really, but the end result is to get to a number that makes the note holder happy, and keep the rest. Typically, a note broker will take 10% or less to remain competative. So where do you find these notes?

First thing that's free is the local county courthouse, though some places have an online system. You can check who holds the notes on the mortgages in your area, and simply send them a letter asking if they would entertain the idea of selling the note and assuring them your quote is free, and there is no obligation. Some will respond, some won't. So, I've found a few online resources that can help get you started. Like I said, some are free and some aren't, but here they are:

Notes for sale in posts - This one is free!

Lien Exchange - This one is a huge resource filled area for all sorts of liens. Mostly like a stock platform and I believe there is a registration fee to buy.

American Capital Exchange - Another fee based resource, but looks to have lots of content.

Now that you found a note, where do you go? Unless you have a good couple of million laying around, you can't exactly buy them yourself. So you go to other companies.

My pick is Charter Financial though you will have to pay a fee for this one. That having been said though, I trust these guys a lot more than some of the others. The fee is $250.00 and you get a lot of training materials and sample forms. I know, because I already did it. Trouble is, I don't have the time or patience for it, and every thing else in my life. This is good news for you though, because if you bring a note to me, I can get you a quote on it and I'll only take 10% off the payout for my part.

The only other resource I found was Note Funding.com though I've never tried to work with them, so I can't vouch for them like I can with Charter.

So there you go. I hope you found this article helpful.