i was told i should buy a real estate note but i don't know what it is?
I have one to sell you. Don't worry if you don't understand, it's legit and all.
Promissary notes are no longer a type. each loan ever completed is a variety of a promissary be conscious. What you're refering to (i think of) is an proprietor carry returned promissary be conscious. the place you sell somebody genuine property and that they pay the loan to you. This works best once you very own the valuables unfastened and sparkling. in case you do no longer very own the valuables unfastened and sparkling, then you incredibly ought to do an all-inclusive-be conscious. meaning that the lender you very own funds to never gets paid off. Say you very own a house well worth $200K and you basically Owe $100K. You sell your place and the shopper's provide you a down cost of $20k. the recent loan which you carry is for $180K and the cost is (for simplicity) $1800 a month. Now in view which you owe $100K on the homestead we are able to think of that your cost is $1000 a month. you will earn the unfold on the money and pocket $800 a month. those numbers are thoroughly hypothetical and unrealistic. I basically chosen them to simplicity, yet it incredibly is the way it works.
Real estate note also knows as Mortgage Note.It is written to promise to repay a specific sum of money plus interest at a specified rate and in a specified time of limit.
A real estate note is simply an agreement between a borrower and lender, where the lender agrees to loan money to the borrower and the borrower agrees to pay it back at a certain interest rate over a certain period of time on a certain payment schedule. The borrower also agrees to put up his house (one he owns or is buying) as collateral for the loan. There is also a mortgage (or deed of trust) involved that establishes the lender's interest in the property, and gives them the right to take the property away if the borrower does not pay the loan as agreed. This is a simplistic explanation of a complicated process, but hope it helps. Many times an individual will own a house free and clear, and will sell it to someone. They will agree to take monthly payments instead of a lump sum; this is called owner financing. What is being suggested is that you seek out owners who have these financing arrangements, and offer to buy the note from them. Usually you will offer to buy it for less than what is owed. For example, if they are owed $100,000 you might offer to pay them $80,000 for the note. The upside to them is that they get 80k right now instead of 100k over many more years. That can be attractive to them. The upside to you is that in addition to the interest that the borrower is paying, you will make an additional 20k over the life of the loan because you bought the note at a discount. The downside is that you are now responsible for collecting all the monthly payments, sending late notices if not paid, and going through the hassle of foreclosure and resale if you don't get paid. You need to know what you are doing before embarking on this.
the simplest way to explain a real estate note is;; it is an I.O.U. where a buyer of the property signs and the bank ,lender, owner of the home or who ever gives the money to them to purchase the home. the note is a proof,that some one has borrowed money , the re-payment plan is also spelled out in the note.when you buy a note, you make money first by discounting it (you pay less for it than it's true value) second by receiving regular monthly interest payments
