| Future Payments or Cash Now? |
The Nefer Note Network
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Future Payments or Cash Now...
Creative home sellers who offer seller financing to potential buyers can often sell their houses more
quickly (and at a higher price) in a slow market.
While applying seller financing techniques isn't more difficult than traditional real estate sales, it is
important to recognize that the buyers looking for seller financing represent a different target market
than typical bank-financed customers.
Similarly, the process for obtaining a large cash payment for the seller after a note is created varies
from the conventional real estate closing technique as well.
Fulfilling a Seller's Need for Cash
In some seller-financed real estate situations, the property owner may have an immediate need for
more cash than is available from the scheduled principal and interest payments. This situation often
comes about when the seller needs to have enough money to use as a down payment for their next real
estate purchase.
In order to quickly obtain a large proportion of the money due from the loan they just created, the seller
could sell the monthly note payments to a buyer for a lump sum of cash. By locating someone willing to
buy the note payments, the seller will have ready cash for a down payment or any other pressing
financial need.
In order to streamline the seller finance sale situation, it is advisable to have potential buyers for the
newly-created cash flow at the ready. A seller can start looking for buyers before the note is created, or
even before a seller-financed buyer is "lined up". This way, the property seller could have a buyer for the
payment stream ready to make the purchase as soon as the new private mortgage is created.
Locating the Right Note Buyer
But what is the best method to find these note buyers? In stark contrast to locating seller-finance buyers
for the real estate itself, a classified ad in the paper is not the best option. Most people looking to
purchase a stream of monthly payments do not look in the newspaper for potential cash flows to add to
their portfolios. An alternate marketing strategy is required for finding note buyers.
In recent years, the Internet has become the best place to find cash flow purchasers. Using keywords
such as "buy monthly payments" or "buy mortgage payments" at a popular search engine website
should lead to many interested buyers.
Sometimes there are so many potential buyers, it can be difficult to figure out where to start. Also, cash
flow buyers tend to have distinctly different financial parameters; an opportunity that meets the needs of
one person perfectly may not be attractive at all to another. Therefore, it is often best to work with
someone who could give the seller a general idea about how notes should be structured.
Using Note Finders...
In the secondary finance industry, a unique group of individuals exists who specialize in locating note
buyers. These cash flow specialists - often known simply as "finders" - have a unique understanding of
what most buyers are looking for. These finders are happy to work with agents and their clients. Many of
them utilize online marketing and have Internet websites to facilitate the buyer location process.
The best of the bunch also look in the newspaper for property sellers offering financing, so sometimes
a good finder will contact the seller if their property is advertised as FSBO. Finders specialize in helping
property sellers locate buyers for secured notes.
Once in contact with a finder, the seller should explain the details of the situation. While note finders
won.t be able to offer any legal advice or assist with the creation of a note, they are qualified to give
general recommendations about what types of terms are attractive to note purchasers. Most
importantly, note finders will be able to help locate a buyer for a newly-created cash flow.
Remember, these finders are not note brokers, meaning they will not "show" the seller's note to buyers
or act as a representative. They will only pass the information along to someone who would be
interested. Once a commitment to purchase the cash flow has been established, the buyer will step in
and complete the deal.
When working with a property seller who needs a lump sum of cash immediately after selling their real
estate, contacting a finder early in the process of creating a real estate note makes sense. By involving
a qualified note finder BEFORE a note is created, the property seller can receive invaluable input
about the payment characteristics that note buyers prefer.
Without this knowledge, the property could sell quickly with the creation of a new note, but the seller
might end up collecting the payments long-term instead of being able to quickly "trade" the future
payments for an upfront cash settlement. If the property seller will need a large amount of cash quickly,
it makes sense to plan ahead for a buyer to purchase the cash flow and involve the services of a note
finder.
Creative home sellers who offer seller financing to potential buyers can often sell their houses more
quickly (and at a higher price) in a slow market.
While applying seller financing techniques isn't more difficult than traditional real estate sales, it is
important to recognize that the buyers looking for seller financing represent a different target market
than typical bank-financed customers.
Similarly, the process for obtaining a large cash payment for the seller after a note is created varies
from the conventional real estate closing technique as well.
Fulfilling a Seller's Need for Cash
In some seller-financed real estate situations, the property owner may have an immediate need for
more cash than is available from the scheduled principal and interest payments. This situation often
comes about when the seller needs to have enough money to use as a down payment for their next real
estate purchase.
In order to quickly obtain a large proportion of the money due from the loan they just created, the seller
could sell the monthly note payments to a buyer for a lump sum of cash. By locating someone willing to
buy the note payments, the seller will have ready cash for a down payment or any other pressing
financial need.
In order to streamline the seller finance sale situation, it is advisable to have potential buyers for the
newly-created cash flow at the ready. A seller can start looking for buyers before the note is created, or
even before a seller-financed buyer is "lined up". This way, the property seller could have a buyer for the
payment stream ready to make the purchase as soon as the new private mortgage is created.
Locating the Right Note Buyer
But what is the best method to find these note buyers? In stark contrast to locating seller-finance buyers
for the real estate itself, a classified ad in the paper is not the best option. Most people looking to
purchase a stream of monthly payments do not look in the newspaper for potential cash flows to add to
their portfolios. An alternate marketing strategy is required for finding note buyers.
In recent years, the Internet has become the best place to find cash flow purchasers. Using keywords
such as "buy monthly payments" or "buy mortgage payments" at a popular search engine website
should lead to many interested buyers.
Sometimes there are so many potential buyers, it can be difficult to figure out where to start. Also, cash
flow buyers tend to have distinctly different financial parameters; an opportunity that meets the needs of
one person perfectly may not be attractive at all to another. Therefore, it is often best to work with
someone who could give the seller a general idea about how notes should be structured.
Using Note Finders...
In the secondary finance industry, a unique group of individuals exists who specialize in locating note
buyers. These cash flow specialists - often known simply as "finders" - have a unique understanding of
what most buyers are looking for. These finders are happy to work with agents and their clients. Many of
them utilize online marketing and have Internet websites to facilitate the buyer location process.
The best of the bunch also look in the newspaper for property sellers offering financing, so sometimes
a good finder will contact the seller if their property is advertised as FSBO. Finders specialize in helping
property sellers locate buyers for secured notes.
Once in contact with a finder, the seller should explain the details of the situation. While note finders
won.t be able to offer any legal advice or assist with the creation of a note, they are qualified to give
general recommendations about what types of terms are attractive to note purchasers. Most
importantly, note finders will be able to help locate a buyer for a newly-created cash flow.
Remember, these finders are not note brokers, meaning they will not "show" the seller's note to buyers
or act as a representative. They will only pass the information along to someone who would be
interested. Once a commitment to purchase the cash flow has been established, the buyer will step in
and complete the deal.
When working with a property seller who needs a lump sum of cash immediately after selling their real
estate, contacting a finder early in the process of creating a real estate note makes sense. By involving
a qualified note finder BEFORE a note is created, the property seller can receive invaluable input
about the payment characteristics that note buyers prefer.
Without this knowledge, the property could sell quickly with the creation of a new note, but the seller
might end up collecting the payments long-term instead of being able to quickly "trade" the future
payments for an upfront cash settlement. If the property seller will need a large amount of cash quickly,
it makes sense to plan ahead for a buyer to purchase the cash flow and involve the services of a note
finder.