A new breed of real estate investor has sprung up over the last few years, the real estate note investor. Investing in real estate notes is not new but it has seen a huge revival. There are basically to types of note buyers.
1) Note Buyers or Note Investors who buy performing seller financed notes from people hold real estate paper, also know as real estate promissory notes or real estate mortgages.
There are many reason a note holder might want to sell a note to a note buyer.
You might want to raise some cash to pay off some bills or you might want to sell you note to have a great vacation.
If you are a note holder and you need to raise just a little cash you could sell just a partial interest in a note for example say you own a $100,000 note that pays you 7% over 10 years, you could sell several years of payments to a note investor. Some Note Investors prefer to do this as it is less risk for them.
2) Non Performing Note Buyers: These are Investors that bad delinquent mortgages or notes mainly from large institutional banks. There are Billions of dollars of bad mortgages or bad real estate promissory notes and many Investors are making a fortune from buying these bad debts from the banks and turning the non performing notes into performing notes.