California Note Buyers
If you are considering selling a house in California with owner financing, be sure to work with one of the California note buyers that are licensed in the state. The goal of California note buyers is simply to buy high quality mortgage notes that will provide a reasonable rate of return over a long period of time. The notes are created when an individual or company sells a property to a willing buyer using owner financing. The property type can be a house, a commercial building, a parcel of improved land, or even a church. Regardless of property type, a California note buyer will determine the riskiness of a particular note investment opportunity and offer to buy all or some of the remaining payments left on that note. Some of the main risk factors to be considered are the credit rating of the payer, the amount of equity in the property, the terms of the note, and the attractiveness of the property itself.
HOW IT WORKS
A note buyer, whether in California, Texas, North Carolina, or any other state, makes money by collecting what are usually monthly payments of both principal and interest. The profits come from the interest rate associated with that note and the difference between the balance of the note and how much the buyer actually invested at that time (called the discount). Since the buyer of the note has to invest a large sum of money upfront, he or she usually does not enjoy any true profits for a long period of time. The main risk to the note buyer is if the borrower stops making payments. If the property has decreased in value due to either market conditions or to heavy damage to a structure, the buyer of the note can lose money. Foreclosure costs and repair costs can be quite high and take many months or even years to resolve.
Success in buying notes can truly only be measured over a long period of time, though a savvy and analytical buyer continually tracks results and has a good idea of his potential future profitability. Although note brokers get paid by an investor when a note purchase occurs and so enjoy immediate rewards, the note buyer has to be in it for the long haul. For the reasons outlined above, mortgage note buying should be performed only by those with strong industry knowledge and sufficient cash reserves to endure short term setbacks.
Seascape Capital is a nationwide note buyer and one of the best known of all California note buyers. Call Seascape Capital today for more information on how to sell your mortgage note at 1-800-634-4697 or fill out our mortgage application to sell your note.