Why Are Real Estate Notes Bought and Sold?


Why are real estate notes bought and sold? Noteholders may choose to sell the note to a real estate investor if they have difficulty receiving regular, timely payments on the note or need cash. They sell the note at a discount because it’s based on future payments using today’s dollars. The sale of the note provides instant cash. And it removes a noteholder from any further responsibility for collecting payments. Investors who purchase promissory notes because they offer a versatile, collateral-backed real estate investment, not affected by stock market changes. Since notes sell at a discount, investors earn returns from the [...]