Re: Note buying Vs. RE buying… - Posted by Mark-NC
Posted by Mark-NC on December 14, 2000 at 08:46:39:
I was heavily involved in the note business for a few years ( brokering 5 to 10 notes a month)and as of middle of this year I droped it like a hot potatoe. One of the reasons I got into it was because I thought is was less work but believe me it’s not. The Note business is very competitive, you can’t price gouge or you will put yourself out of business. Plus there is a lot of hype in the note business as far as what can be done, but when it gets down to getting it funded thats a whole new story.
Although you can make some money brokering notes, It has become more intense as to the paperwork and qualifications depending on who you are selling to.
I have recently found that is is much eaiser, more profitable and less time consuming to do the other things described on this board as apposed to brokering notes. Also I have a lot more time to myself and I am making more money.
Also if you have a good mortgage broker you will find better lending products than Note Products ( as far as Qualifing the buyer for a good Loan or Note).
It has also been my experiance that Many home sellers are very confused by the Note buying process. So before you can buy the Note You have to educate them on how to set it up, qualifing the buyer and the whole nine yards.
Here is something many people may not be aware of in Note buying. If you tell a seller or give them information on how to sell their home using a note, telling them how to qualifing the buyer and selling to you at close, without doing all the paper work ect, that is fine.
BUT, as soon as you take control of the transaction and do everything for them you are crossing a line and in all reality it would make you look like a Loan broker. If you have a license that is OK, but if you don’t be careful.
How do I know this? Well, I got a Nice little letter from the NC state banking commission trying to shut me down and possibly slapping a fine on me. I did get out of it but it made me very aware of how I had to represent myself. So taking that into consideration I quit helping sellers do this. And besides that the average seller can not comprehend the whole process unless you take control of it.
Personally I find it easier to get an option or just by the home at a lower offered price, that way they only know one number “the sales price” even if it may be low. That seems to be eaisier for me than telling the seller. Although your selling your home for 50,000 your only going to get 45,000 because we have to discount the note.
And as far as title seasoning issues with notes, it is an issue. Although some note buyers will buy this way they are usually cautious of them and may want more than one appraisal or a national appraisal or they may want to order the appraisal themself.
Just my experiance and 2 cents