How do Notes work?

[Rafael Cortez]

Hello, I have come across a few investors who are in the Note buying business, each has given me a different description of what this is, some talk about real estate securities, some others are straight hard money and call it note buying so I'm a little confused on this topic. Can anybody clarify how how the Note buying process works??

Thanks!

-Rafael-

[Chris Martin]

In a simplistic nut shell, people finance investors, or people sold their house and who took back owner financing (a deed of trust or mortgage) and a "note" will sell their future cash receipts for a lump sum. Not an endorsement, but more for education, see also http://www.noteworthyusa.com/ and types like http://bostonnote.com/ ... or of course biggerpockets.com with 'note buying' or 'note buying tips' in the search bar.

How it works: Note buyers (note investors) will buy the note from people who hold the note (e.g. the people who sold their house on 'terms'). Once sold, the person paying the note will direct payments to the new note owner....