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How Notes work: A quick Primer

A real estate receivable, more commonly known as a real state note, is a type of promissory note in which the seller of the note (typically the owner of the real estate) receives payment and interest from the buyer, often in monthly installments. Whether that note be for a deed of trust, land contract, title, or mortgage note, no third party bank or lender is required in the process.
If you're interested in selling a real estate note, you can do so right here with Red Enterprises. Whenever you're ready, you can request a free quote from us and we can get to work. If you'd like to know a little more about real estate notes and the buying and selling process, continue reading below.

What is a Note?

As previously mentioned, a real estate note is a real-estate-secured document, requiring the buyer to make monthly payments to the seller in exchange for the piece of real estate. A down payment must first be made, prior to determining the monthly payment and interest rate. Quite similar to owner financing, these notes can be of many forms, such as a deed of trust, land sales contract, or promissory note and contract. Of course, notes can be bought and sold continually, as the payments the seller receives are viewed as assets and can be sold as such. But why would you sell a note?

Why Sell a Note?

In selling a real estate note, there are a number of ways why someone would do so, but buyers can also benefit. Selling the note provides instant cash for the note owner and, depending on the amount left to be paid, money down, and interest rate, it could also be beneficial for the buyer. In terms of selling, some reasons for doing so could be to pay off debt or simply because the seller no longer wants the responsibility of the note.
As mentioned, buying a note can be beneficial and appealing for the discounted price. Because future payments are being sold, notes are typically bought and sold at a discounted price, or lower than what they were originally bought for. In short, the rate of return must be greater than the note's interest rate.

Interested in Selling a Note? Call Red Enterprises!

While they may be a bit complicated, real estate notes, and the buying and selling of such, are quite common. And the process can be easy when you work with Red Enterprises. We've been purchasing notes from sellers for years, and we can help simplify the process.
If you have any questions or comments about selling your note, be sure to contact us today. You can also give us a call at 307.213.9095.