Can anyone explain how notes work?

Question

can anyone explain how notes work

Mike Wood · Answer

There are a lot of great opportunities to make money in the note business both as a finder and a buyer of notes.  It is a business however and not a get rich quick.  If you are thinking of starting the business be serious about it and willing to find out what it really takes and then treat it like a business.  It will give back great returns if you treat it right.

Mike Wood · Answer

In short vague my answer was good for the vague question asked.  :)

Mike Wood · Answer

The question is vague.  It sounds like you are asking how does the Notes Business work but you could mean how does a note work and how are they created.  What is the question exactly?  None of these can really be answered in a few sentences.  it is somewhat of a complicated thing.  It's like an automobile.  If you say how does it work do you want me to say turn the key and then the wheels move and it goes or do you really want to know how the key sends an electronic pulse to a computer that then sends another to other parts of the engine and then through combustion and yada yada...
So ask a direct question that can be answered.  I spent several years learning this all and simplified it in 50 pages.  A couple of paragraphs doesn't leave room to expalin all of "how it works".

N/A N/A · Answer

A friend loaned me a tape of a Robert Allen seminar and basically this is exactly what they are training people to do. They have them cold call anyone they can find with a note, get the info, and say I'll get back to you. Then they call up a real note-buyer (one of the companies that specializes in them) to see what they will pay for it. Then they try to arrange a purchase for more than that, with the hope of pocketing the difference. The whole thing seemed a little far-fetched to me, since the note owners could always just go sell their note themselves if they wanted to, but I guess it sells a lot of seminars. My guess is that you are encountering a lot of his graduates.

Frank Adams · Answer

Many people try to oversimplify the note and everything attached to it. Many people (and I'll probably be accused of being one of them) try to overcomplicate the note.

Take a college level course that deals with BONDS. Bonds are debt instruments issued by Governments (Federal, state and local), businesses and INDIVIDUALS. The individual bonds we call NOTES. If you want to have a good idea of how the bond/note market operates taking a course like this can be invaluable.

I'm not sure how many (IF ANY) of the "note buyers" that send me postcards make any money at it. I receive an average of about 25 postcards and letters per month, in addition to another 5-10 phone calls from people who claim to be experts in note buying.

Occassionally I'll give one of them the specifics on one of mine just to see if they actually HAVE ANY IDEA WHAT THEY'RE DOING. So far I've never been disappointed! I'm always entertained to hear them trying to remember how to plug the forumula into their Texas Instruments BA II calculator. Somehow they never get it right and say they'll have to get back to me! I guess that means they're going to phone up their "mentor" to remind them how to do it.

NOTE TO EVERYONE READING THIS POST. I NEVER sell my notes! I'm making 12-16% on them and I DON'T NEED the cash I could gain from selling them, so don't bother posting back about how you can cash me out.

Pay $50 or so to your local junior college and take a finance course that covers government and corporate bonds.

all cash

Sam Green · Answer

I think he asked how notes work.  Can you help explain how they work?  If so, please try and answer the question with specifics.  General info like "it is not a get rich quick" is not helpful to anyone.

Thanks!

Ishmell Wright · Answer

thanks for the explanation

N/A N/A · Answer

Hello,
To elaborate on what Ohio Realtor said:

A mortgage note is a loan document that secures real estate. A note may be bought and sold. Some notes have value and some do not. Those that are not high in value are called "trash notes". There are 1st position notes, which means that their is only one lien holder. 2nd position notes, which means that their is 2 liens on the property. Also, there are "wrap around" notes which are similar.

I hope that this answers your question.

Jim Gordon · Answer

The note is the actual loan documentation. The mortgage secures the property to the note.