A noteholder in the world of real estate is the person or party who receives payments on the note.

If a noteholder is having difficulty receiving regular and timely payments on the note, or if they are in need of a lump sum of cash, they may choose to sell the note to a real estate investor. They would sell the note at a discount since it is being purchased based on future payments using today’s dollars. The sale of the note provides the noteholder with instant access to cash and removes them from any further responsibility in collecting payments on the note.

An investor who purchases a promissory note often does so because it offers a versatile, collateral-backed real estate investment that is unaffected by the fluctuations of the stock market. Because the notes are purchased at a discount, an investor earns returns through the difference in the discounted purchase price and the real value of the note, as well as through regular monthly principal and interest payments. They can also offer a faster and higher return on investment than stocks and bonds.

At Alvernia Capital Management, we purchase promissory notes in affordable neighborhoods throughout the U.S. Our intent is to stabilize these neighborhoods while avoiding the displacement of its residents.

If you’d like to get in touch with a member of our team, fill out the form here to let us know more about your situation.