| Mortgage notes are legally binding contracts secured | | | | with information about the property and area where it |
| by real estate. The document records the promise to | | | | is located. Drive-by BPOs are commonly used in real |
| pay funds borrowed to buy houses, buildings or vacant | | | | estate transactions that do not require physical |
| land. Also known as promissory notes, mortgage loan | | | | inspection of the property. |
| contracts record the amount of funds borrowed, | | | | The type of real estate appraisal and who is |
| interest rate, and person responsible for payment. | | | | responsible for the cost should be discussed prior to |
| Mortgage notes can be sold to private real estate | | | | entering into a contract with a mortgage note buying |
| investors for a lump sum of cash. Numerous reasons | | | | company or private real estate investor. |
| exist for selling bank notes. The most common include | | | | The final step of selling mortgage notes involves |
| obtaining cash to pay off credit cards and other types | | | | closing the sale. Sellers are required to sign an |
| of outstanding debts such as medical expenses or | | | | Assignment of Mortgage, which transfers all or part of |
| student loans. Private investors who buy real estate | | | | future payments to the mortgage note buyer. |
| notes pay cash to note holders in exchange for | | | | Mortgage assignment documents must be recorded |
| receiving monetary installments originally paid to the | | | | through the court system and all closing conditions met |
| owner. | | | | before funds are distributed. |
| When selling cash flow notes to investors, note holders | | | | Real estate closing can take place in person or via |
| must provide specific information about the note. | | | | mail. When closing takes place in person, mortgage |
| Investors want to know the face value, interest rate, | | | | note holders receive closing documents prior to the |
| number of payments received, status of the note | | | | meeting. Note holders are required to provide original |
| (current or delinquent), balance due, and sale price. | | | | security documents including deed of trust, mortgage |
| After reviewing mortgage notes for sale, investors | | | | note, and contract for deed. Upon approval, investors |
| present their initial offer. If the offer is accepted, sellers | | | | issue a check or wire transfer funds directly to the |
| might be required to provide financial documents | | | | note holder's bank account. |
| including current and previous years' tax returns, | | | | Selling mortgage notes to private real estate investors |
| income statement, title insurance and amortization | | | | can take a few weeks or a few months to complete. |
| schedule. | | | | Much depends on circumstances and amount of the |
| Mortgage buyers generally require a real estate | | | | transaction. |
| appraisal. Some private investors cover the cost of | | | | When selling real estate notes to mortgage buyers it is |
| property appraisals, but this expense is usually paid by | | | | imperative to engage in due diligences to ensure you |
| the mortgage note holder. | | | | are working with a trustworthy professional. Obtain |
| Occasionally, real estate investors are satisfied with a | | | | references and contact individuals who have worked |
| drive-by broker price opinion. BPOs provide investors | | | | with the mortgage note buyer. |