Note - short for promissory note. An IOU where someone agrees to pay someone else.
In real estate the note is the loan and the note is normally secured. The security for the the loan is a mortgage or trust deed (close but not exactly the same). Having a security agreement in the property means there is a lien against the property.
Note investing normally means buying a pre-existing note from someone who decides they want to sell for a lump sum rather then wait for a note to be paid off over time.
Most notes that are sold were created when the seller of a property decided to take back some or all of what they would receive from the buyer in the form or a note. Rather then all cash they agreed to take (monthly) payments.
To buy a note is to take over the lenders position.
I notice you are full of questions today, so let me explain what notes are:
I will demonstrate this by using a piano keyboard which is set up in octaves.
Each octave has thirteen "notes", with the thirteenth being the beginning of the next octave as well. Starting with A, an octave is A, A#, B, C, C#, D, D#, E, F, F#, G, G#, and again, A.
The interval between each two successive notes is called a half-step. Therefore, there are 12 intervals of a "half-step" forming what is called an octave.
If you are interested in note investing you should pay special attention to taking "half steps", before you become involved in this type of investing.
I work for a large bank in the Real Estate Recovery Dept. I sell notes all day long to investors. Most of what I have are 2nd liens. A lot of these are sold for .10 on the dollar. These are loans they have been defaulted on and not enough equity for us to foreclose. Many of these are bankruptcy situations. I'm trying to understand the other side to this. That's why I came to this forum.
Note - short for promissory note. An IOU where someone agrees to pay someone else.
In real estate the note is the loan and the note is normally secured. The security for the the loan is a mortgage or trust deed (close but not exactly the same). Having a security agreement in the property means there is a lien against the property.
Note investing normally means buying a pre-existing note from someone who decides they want to sell for a lump sum rather then wait for a note to be paid off over time.
Most notes that are sold were created when the seller of a property decided to take back some or all of what they would receive from the buyer in the form or a note. Rather then all cash they agreed to take (monthly) payments.
To buy a note is to take over the lenders position.
John
[addsig]
Where do you find people who are willing to sell their notes? What if the buyer defaults, do you get the property for the default amount?
Arb,
I notice you are full of questions today, so let me explain what notes are:
I will demonstrate this by using a piano keyboard which is set up in octaves.
Each octave has thirteen "notes", with the thirteenth being the beginning of the next octave as well. Starting with A, an octave is A, A#, B, C, C#, D, D#, E, F, F#, G, G#, and again, A.
The interval between each two successive notes is called a half-step. Therefore, there are 12 intervals of a "half-step" forming what is called an octave.
If you are interested in note investing you should pay special attention to taking "half steps", before you become involved in this type of investing.
John $Cash$ Locke
[addsig]
Thank ya, thank ya very much. :o)
I'm intersted in becoming familiar. I'm not courageous enough to venture into the unknown.[ Edited by arborlis on Date 07/04/2004 ]
What is the differance between a note investor and a home investor? Is a note something that the bank has, or is that differant?
I work for a large bank in the Real Estate Recovery Dept. I sell notes all day long to investors. Most of what I have are 2nd liens. A lot of these are sold for .10 on the dollar. These are loans they have been defaulted on and not enough equity for us to foreclose. Many of these are bankruptcy situations. I'm trying to understand the other side to this. That's why I came to this forum.