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Four Types of Note Investors You Must Know of

investing fundamentals

In a previous blog, we have discussed how to purchase real estate notes. In today’s session on investing fundamentals, we will take you through a different aspect of this business, about how to sell them.

Note investors are classified into groups with certain characteristics. Each of them, except the last one, has certain benefits. So, we will be discussing these groups.

Institutional Buyers

These buyers use their money to purchase notes from people around the country. These people want value for their investment and always look for ways to maximize the investment. They may use the note and reinvest it in the secondary market.

These people are usually experienced, and can different good notes from the bad ones. They know what to look for before buying a mortgage note,and are responsible for providing note investment training.

If the note is non-performing, they don’t rush to get in touch with a broker. Instead, they look for ways to settle it and change the loan terms, to suit their interests.

However, in extreme cases, they may contact a broker.  Finding these people is a real deal, and also meeting their requirements. If all goes through, then you are set to gain maximum income.

Private investors

Unlike institutional investors, private investors work in a particular geographical area. They go through a long list of criteria before thinking about mortgage note investing.

If you are a part of investment groups, or you network with the right set of people, then you can have access to these investors.

They can be as seasoned as institutional investors, or not. They can work full-time as an investor or part-time. While selling a note to these people, you need to exercise extreme caution.

If you fail to miss one or multiple payments, they will be more proactive than institutional investors. So, you might not want to do that.

Also, these investors might not possess enough sophistication. They may not know about underwriting, and a note written by them can instigate trouble. 

You need to go through these notes to decide if anything is wrong with you. As a matter of fact, you need to check if there’s any guarantee associated with it, and what type is it, actual or implied.

It’s essential to check with the SEC (US Securities and Exchange Commission), and other regulatory bodies for rules and regulations. This will save you from receiving a sermon from the entity itself. Ensure that you are not making any fake offers to buyers, selling one note to multiple ones.

Also, transfer the whole ownership of the note to the new investor, and ask them to follow up. Getting in touch with a lawyer can help you during tough times.

Broker (Master Broker)

The third category of investors includes brokers themselves. Not just any broker, the masters of it. These people have years of experience, and can actively participate in training sessions. In other words, they can act as a mentor to you and others and teach you about investing in mortgages.

They will buy notes and assist others in making the best decision. When others land a successful deal, they will receive compensation, either a mentorship fee or a percentage of the amount.


Like in any other business, you will see these people here too. I think you will see more of them here, with lucrative offers, and stuff.

They pretend to buy notes (in exceptional cases fakers will buy them). If you encounter these people, good luck closing a deal. With the advent of the internet and digital activities, they are more on the rise.

Read Aslo: Private Lending: Note Investment Training: Session 2

They may come across as a legit note enlisting platform, acting as a budding place for enthusiasts. You are less likely to find any real deals here, and therefore, less likely to close any deal. Either the price will be too low, or the deal will be ineffective.

Beware of these people, period.

While you are selling these notes, you need to perform due diligence on the investors.

Check out their profile, portfolio, go over their experience, and see how many deals they have closed. What’s their expertise, how will they deal with certain situations, and what’s their due diligence technique.

See if the buyers are investing themselves, or someone else is doing it. Check their reliability, by going through their reviews and ratings. Internet is a powerful tool to look for these people.

As a beginner, you can search for terms as note investing fundamentals to learn about selling notes, and how to locate the perfect sellers.

If you are more experienced, you can try different options, because you have now grown a network of similar-minded people.

You may find it difficult to look for the right one, without proper training. So, look for the training first, and then maybe proceed to buying and selling notes.

You may ask, ” where can I get this training?” Well, there are several resources, but our website Note Conference covers all these concepts, and much more.

This website is a diverse one, talking about topics never mentioned before. You can visit our website, and choose where to start.

You can start from the very basics, like what are real estate notes, and why should anyone invest in them. Then you can move on towards more complex topics, like how to deal with institutional investors.

Why is it necessary to train yourself? Because you want to make the best decision when it comes to note investing. You need to know how to identify the good notes from the excellent ones.

With the training, you can be s better investor. Also, you can train others, and let them learn from your mistakes. Other investors can identify you as the true potential, and you will get better deals. As a result, your portfolio will grow, and you will gather more experience. And with that, you will come across new opportunities. Are you willing to do that? Then we welcome you to our blogs and classes.

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