Want to learn how to convert a physical rental property into a mortgage note

[John Gonzalez]

Hello,

I own a physical rental property. I want to convert this property into a mortgage Note.

What are the exact steps to do this?

Thank you

[Alecia Bolton]

You sell the property and owner finance it.

1) sell property 

2) create note/mortgage/deed of trust (depending on state); I would still accept a certain amount down, and take care to notice usury laws of your state.  This is the most complicated piece because you are essentially the mortgage originator (which might run into licensing concerns depending on how many times you do this and your state), and you need to make sure the person who is buying is a good borrower.

3) close with a title company or lawyer (state dependent) who knows how to deal with this type of transaction

4) set up an account with a servicer to collect the money from the borrower (not required, but highly recommended from note buyers)

5) collect payments