Question 1

Why would I sell my mortgage note?

Accepted Answer

Circumstances change and many sellers would prefer cash today rather than small payments that trickle in each month. Here are just a few reasons people have sold their note payments for cash:
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Retirement
Taxes
Investment Opportunity
Expensive Medical Care
Vacation
College Tuition
Unexpected Financial Changes
Peace of Mind – no more worrying if the buyer is going to make late payments or having to foreclose
Accounting headaches, IRS regulations, paperwork hassles, and the list goes on…

Question 2

Why Owner Financing?

Accepted Answer

Owner financing is on the rise with more sellers agreeing to accept payments from buyers. There are many reasons people agree to take back a note, deed of trust, mortgage or contract including:

Quick sale of the property
Monthly income from the note
No hassles of bank financing (fees, delays, and strict underwriting)
More qualified buyers
Property is hard to finance

Question 3

What is a note appraisal?

Accepted Answer

A note appraisal reflects the current market value of your payments similar to what a real estate appraisal provides for real property.  It shows what your future payments are worth in cash dollars today and is sometimes referred to as a “note analysis” or “quote”.
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We recommend you have your note evaluated once a year, as pricing may change based on market conditions.

Question 4

How do I maintain the value of my note?

Accepted Answer

Many of the items that affect the value of your note were determined at the time the property was sold. However, there are three things that you can do now to make your note more valuable:
Keep good records and copies of the payments received,
Obtain a copy of the property insurance policy from the buyer each year; and
Verify the property taxes are paid when they come due (usually twice a year).

This will help maintain the value of your important asset and avoid any unpleasant surprises.

Question 5

Can I sell all or part of my note?

Accepted Answer

We can purchase all or part of your remaining payments. Selling part of the payments allows you to receive a lump sum of cash up front, then payments when the note reverts back to you. We can even pay cash for a portion of each monthly payment.

Many people elect to sell just enough payments to meet their cash needs today and keep some of the future payments as an investment or nest egg. Always ask for an option that meets your needs.

Question 6

How is the value of a note determined?

Accepted Answer

The value of a note is affected by the down payment, interest rate, payment amount, and term as well as the buyer’s credit rating and payment history. The type, condition, and value of the property also impact the value of your note.

The time value of money, which makes payments due now more valuable than payments due in 20 to 30 years, also plays a role in the evaluation process. Generally, due to inflation, money in your pocket today is worth more now than later. All of these elements will be taken into consideration in determining the current value of your note.

Question 7

How will selling my note affect the Payer?

Accepted Answer

The Payer is the borrower(s) who is/are obligated on your note. They experience no change in the way the payments are structured. The only change will be the address where the payments are mailed. If the note is currently being serviced by a professional servicer, we oftentimes keep the note with that servicer to preserve the Payer’s relationship and customer experience.

Question 8

How do I get started?

Accepted Answer

The first step is to obtain a quote using our online request a quote form or by calling us at 843.977.3753 or emailing us at deals@station28capital.com.

We also request copies of the documents relating to your transaction:
Note and Mortgage (Deed of Trust or Contract)
Closing statement
Buyer information
Pay history and current balance
Previous title insurance policy
Current hazard insurance policy

We will then provide you an offer subject to the standard title, appraisal, and buyer’s credit review. Once under contract, you will receive your cash as soon as all of the documentation can be obtained.

This typically takes as little as 10-15 working days.

Question 9

How will I be paid if I decide to sell my note?

Accepted Answer

The purchase price is paid in guaranteed funds (cashier’s check or wire transfer) upon receipt of final transfer package and original documents.

We are happy to wire funds to the title company so you may exchange your original documents for the proceeds, assuring the safe and secure transfer of your valuable asset.

Question 10

What is the Process of Selling My Note?

Accepted Answer

The process of trading or selling a note is simple and straightforward.

It involves the following steps:
Obtain a quote from us
Share the “Collateral File” with us, which is all the loan documents and payment history
Enter into a Purchase and Sale Agreement, sometimes called a Commitment to Purchase Agreement
We conduct due diligence, which includes items such as a review of Title, public records, and other reports
Closing occurs with a local title company or real estate attorney, which handles execution of the transaction documents and escrow/disbursement of funds

Question 11

How Long Does Selling a Real Estate Note Take?

Accepted Answer

We close most note purchases and sales in thirty days or less, with an average closing timeframe of two to three weeks. This period typically begins with the quote for the note purchase and concludes with the settlement of the purchase funds.

Question 12

What Information is Needed?

Accepted Answer

Similar to purchasing a car or a house, we need the specifics of the asset (the note) and the collateral that backs it (the property and payor securing the note).

Most of the information needed is contained within the Collateral File, which is the:
 note itself
security instrument (mortgage or deed of trust)
settlement statement from the creation of the note and sale of the property
servicing records
copies of any documents and records detailing the underwriting of the note when it was created

In addition, we generally will have a few questions about the scenario and facts of the sale of the property and creation of the note, as well as about the Payer.

Question 13

I have a Deed of Trust and not a Mortgage. Is There a Difference?

Accepted Answer

These are different types of security instruments that secure a note with a particular piece of real estate. The use of either of these is typically based on the state where the property is located. We’re happy to buy notes backed by either of these in the states we operate in!

Question 14

Do You Buy Notes In Every State?

Accepted Answer

While we’d love to help everyone, there are some states that just aren’t the right fit for us.

We do not conduct any business in the following states:
California
Illinois
Maryland
Maine
Nevada
New Jersey
New York
North Dakota
Oregon
Pennsylvania
South Dakota
Washington DC
Washington

We define conducting business in a state as the following:
The state where the property securing the note is located
The state where the loan was originated
The state where the Payer resides
The state where the Note Buyer/Seller resides

Question 15

Why should I work with Station 28 Capital?

Accepted Answer

We pride ourselves on:
Doing business with honesty and integrity
Focusing on guidance, advice, and excellent customer service
Competitive quotes
Providing customized options and flexibility on all note purchases
Security and confidentiality are of the utmost importance with all transactions

Read our reviews: Here

Question 16

Can I Buy Notes from Station 28 Capital?

Accepted Answer

Yes! We sell both entire notes and note partials. We also provide note brokering services to help you find the perfect note to buy if you need something specific or unique. Just reach out – we’re happy to help!

Question 17

Do You Offer Training or Education?

Accepted Answer

Yes! We’re happy to offer both in-person and virtual (webinar) educational workshops covering seller finance and buying and selling notes for groups and events.

These workshops are complimentary and typically suited for:
Real estate investor meetups and networking events
Note investor clubs
Real estate agents and RE professionals 
Flippers and wholesalers who want to sell with seller financing

Please submit a contact form and we’ll call you to discuss your needs.

Question 18

Do You Offer Mortgages?

Accepted Answer

While Station 28 Capital does not originate or offer new mortgage loans for owner-occupied properties nor create consumer-purpose home loans, Patrick is a licensed mortgage loan originator and is more than happy to help with this.

For more information on loan origination please click here.

FAQ

Selling or investing in a mortgage note can feel complex, but it doesn’t have to be. Here, we’ve answered the questions we hear most often, so you can move forward knowing exactly what to expect.

Frequently Asked Questions