Posted by dave(wa) on December 31, 2006 at 14:03:04:
This is a good article posted on this web site that does a good job of explaining them.
Understanding notes - Posted by keith
Posted by keith on December 31, 2006 at 11:03:05:
Can someone please give me a brief explanation of what realestate notes are?
Notes are… - Posted by Gary-Oregon
Posted by Gary-Oregon on January 01, 2007 at 01:16:09:
evidence of a debt (an IOU). Bsically, if I agree to buy a property from you, and you agree to sell your property to me, and in our agreement, we decide that you will carry-back some of the financing (say $20K). A note will be prepared that evidences this indebtedness. It is usually secured against real property, although it is not necessary to do so. When it is secured by real property, either a Deed of Trust, or a Mortgage (depending on the state, or area of the country the property is located in), will be recorded in the county clerks records for the county where the property is located.
The monthly income stream from this note, as you can imagine, has value. The question becomes… would you rather have your money trickling in on a monthly basis, or would you prefer a lump-sum cash payment? Many folks prefer the latter, so they choose to try to see what their note might be worth. These notes sell at a discount (so a $20K note may only sell for $15k or $16K). The amount of the discount is determined by several factors that either make the note more desireable or less desireable. These factors are too consuming to address in such a limited format. If you have further questions please follow-up. LOL