To hold a note means you are accepting payments as a bank would from someone who has signed a promise to pay over a period of time for a certain amount of interest. There are many people holding Real Estate Notes that they never wanted to hold in the first place (ie..seller finance),or may need a lump sum of money due to unexpected expenses. Many people may need cash now to pay medical bills, settle a tax debt, pay for college tuition, or start a business. The list goes on an on. If you fall into one of these categories and hold a Real Estate Note, but no longer want to get your money in small monthly payments and instead need a large lump sum of money there is help. There are many reputable investors willing to purchase Real Estate Notes at a discount. The investor is willing to buy because they know that they can make a profit from the discount. Without the discount there is no incentive. The seller is willing to sell because they need a large lump some of money for reasons already described. But there is another factor that motivates individuals to sell their Real Estate Note and that is the factor of time. With time comes risk. The longer an individual holds a Real Estate note then the longer note holder has to wait for their money, and the greater the chances that they will receive only part of it, or even not at all. In addition, the value of money depreciates with time--$1 will buy more now than it will 15 years. That is to say money in hand today is worth more than the promise of money in the future. And the investors are more willing to accept the risk of the payor defaulting in hope to turn a profit. And if you hold a Real Estate Note and no longer want the risk, but have no need for a lump sum of money you can still benefit by re-investing the money in a secure government bond or other secured investment. |
