Buying mortgage notes is a hot topic among savvy investors these days. Prices are lower than ever, and the potential to sell them later at a higher price is huge. Of course, like any investment, choosing the right mortgage notes for sale is the key to success.
Abby Shemesh of Amerinote Xchange recently sat down with internationally recognized investment guru, Jason Hartman, to discuss the details of buying and selling mortgage notes. Let’s go over some of the key points that were made.
The Climate Is Right for Investors and Sellers Alike
In the wake of the recession that occurred from 2007-2009, big banks aren’t as active as they were. Prior to the financial crisis, banks were more than willing to give out substantial loans to virtually anyone, regardless of financial standing. Now those banks seem to be overcompensating by making it difficult for many people to secure a loan. As Abby Shemesh put it, “The pendulum has swung in the opposite direction.
The hesitancy and overly cautious behavior of these big banks has caused loan seekers to hunt down alternative ways of obtaining money quickly, making mortgage notes for sale popular alternatives. Because there are few other solutions available at this point in time, clever investors can make a tidy profit by purchasing affordable mortgage notes and holding them until prices soar. At the same time, mortgage note sellers are able to easily find multiple buyers, giving them options as well as opportunities. In many ways, it’s a win-win situation for both parties.
Due Diligence: Proceed with Caution
Of course, investing in mortgage notes can be a treacherous path for the ill-informed buyer, so some preliminary research is paramount. If you’re considering buying mortgage notes for sale, you must take steps to avoid what Abby Shemesh calls a “clouded title.” Consider all factors that could lead to monetary loss, such as the condition of the house, the collateral securing the note, and the property’s value before making your decision. In short, don’t gamble. Put in the initial effort so you’re confident when it’s time to sign the papers.
The appraisal, evaluation, and verification are critical steps that should never be overlooked. Although you’re welcome to take all available information into consideration, appraisals should be performed by an unbiased appraiser who has nothing to gain, and no affiliation with the mortgage note sellers, buyers, or brokers. Additionally, buyers should always consult an attorney and accountant before purchasing notes.
Is Selling the Right Course of Action?
Abby Shemesh stresses is that selling real estate notes is not for everyone: “Selling a note should not be your first line of defense; it should be your last line of defense.” He recommends that sellers look into all available options, including seeking low-interest loans from banking institutions. Sellers can expect to sell notes at a discount ranging from 5 to 35 percent, which may or may not be ideal.
Of course, selling mortgage notes doesn’t need to be a last-ditch effort. In fact, it can be a positive experience. Because there is not currently any software to determine the value of mortgage notes, these sales require lots of face-to-face negotiation. When both parties come to a mutually beneficial agreement, there are no losers. The key is for mortgage note sellers to diligently research potential buyers, talk to them on the phone, and make sure that they have a strong online presence.
Contact Amerinote Xchange for Further Information
If you’re looking for straightforward and reliable mortgage note buyers, look no further. At Amerinote Xchange, we are proud to offer over a decade of experience to ensure a quick and simple transaction. We’re currently one of the most rapidly expanding loan acquisition firms in the country, and we go to great lengths to ensure the complete satisfaction of all of our valued sellers. Call (800) 698-3650 or contact us online to speak to one of our helpful experts today.