Wholesaling Notes

[Teri M.]

I've been reading the forums and i also am interested in non performing notes. They say u have to get a mortgage broker's license to do business legally but cant u just wholesale the note just as you would the property it self? Put a contract to buy the note then wholesale it to another investor, this can be done right... Please correct me if im wrong. Also if i am right would i have to put emd on note?

[Don Konipol]

The question of needing a mortgage brokers license - no if the notes you are dealing with are commercial, maybe if the notes are residential. Depends on the state you operate in and the number of notes you are wholesaling.

There are a ton of "cash flow specialists" brokering notes out there. Most buy from individuals and sell to institutional note buyers. With competition so heavy, they work on relatively thin margins. The volume brokers spend a ton on direct mail and other marketing campaigns to make their phone ring.

If you are seeking to flip a few notes in your spare time then you can operate with little overhead - a website, hand out some business cards at your local real estate investment club and do a few each year. If you're thinking full time business, better be prepared to invest some capital in marketing, office, professional website, doing seminars, speechs, advertising, etc.