Note Discounting Article

Become a Note Buyer

One lucrative method of making secondary or passive income is to buy notes. These can be in the form of real estate mortgages, business notes and personal notes and others.

Buying a note such as a real estate mortgage is a much sought after service. Many of us have heard of how the mortgage companies will sell the mortgage notes they have to a secondary market. These notes are usually discounted to give a secondary buyer an incentive to want to buy the note. The seller is willing to discount the note so they can receive immediate cash to replenish their reserves and allow them to continue making new loans.

In a similar fashion, persons who have taken back a second mortgage on the sale of a real estate property may be looking to cash out of the loan they made to receive the immediate cash instead of waiting for the loan to mature in 5, 10 or 15 years, whatever the term of the loan. Having an immediate need for cash is very common reason for wanting to sell their note.

Of course in order to buy such notes will require cash. If you have cash sitting in the bank earning the meager 2 to 5 percent the bank is paying, this is a very good way to earn a much higher yield on your money. In fact, it is not uncommon to be able to earn upwards of 20 to 25 or even 30 percent on your money, depending on how the deal is put together and how much of a discount is given on the note.

On the other hand, what if you don't have that kind of money laying around in a bank somewhere. It is still possible participate in the note buying market simply by brokering a transaction. In this case, when you find an owner of a note who wants to cash out, you would then find the money source, or someone who wants to invest their money for a higher yield, structure the deal and earn a commission.

This is still a good deal for both parties since the note owner gets the immediate cash they need, and the investor gets a safe, high yield investment that beats the banks everyday. You earn the commission as a service provider since neither party would have found each other on their own.

One of the foremost persons in the area of note buying is Donna Bauer. She is known nationally as The Note Buyer. She got into the business years ago when she was raising four small boys and baby sitting for some added income. Realizing that babysitting for a dollar an hour was not going to get her ahead, she stumbled into the business of buying notes. Today she is one of the nations most recognized authorities on note buying. She also helps others who want to become note buyers themselves with education and networks of investors. For more on getting started in the note buying business visit The Note Buyer.com.