Selling Notes to Banks?

Whay are you selling the note to the bank? Am unclear on that whole thing.
There are many notebuyers out there, that are regualar people like you and me that buy notes instead of properties. You have to wait for your note to season before a note buyer will buy it, and hopefully it will be a performing note (meaning the person in the house is making their payments).So to answer your question if I am understanding it correctly, you can sell your note, it most likely will be to a private party not a bank.

I read this scenario in a book, but the guy only waited three weeks to sell the note to the bank. Similiar to you purchasing a house with a bank, but they sell it to a third party. Says anyone can do this. Selling the mortgage note it seems.

this question?

Here is a question for you. Do you own this $100,000 property free and clear so that you are doing a 90% owner carry mortgage?? Do you own any properties free and clear? If not, what happens to the existing mortgage on the $100,000 property?? The original one between you and your lender? So if there is a mortgage you will sell the bank a discounted note on a note?

Finally, I don't understand your numbers. You sell a $90,000 note to a bank for
$3600 less than you have the note for and you make $26,400. I under stand the $10,000 down. That = $6400 profit. I must admit I don't do notes at all and there must be something I missed here. I do know people that BUY the discounted notes and then sell or hold them for MORE than they paid. I also know that you have to know what a good note deal is, just like evaluating a property. Finding the note deal is the hard part. So here we are again.

What year was this guys book written? Is he still in jail or is he out yet? (just a joke!)

Gotta go make some offers!
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Good theory for the book but hard to accomplish in today's market. Today's note buyers need 6 month seasoning minimum, preferably a year. Another factor is if you are flipping the property after a rehab or not. Then there is the bump in the road that most note investor's in today's market won't commit to more than 60-65% ITV (investment to value) ratio. So for the $90,000 note, they would go no more than $60-65,000, much like a hard money lender deals with ARV. In a stronger market where property is appreciating, yield on the investment would carry more weight to determine the value of a note. In today's market, protective equity is the driver of the value of the note. Would you rather get 8% at 60% of value or 15% at 87% of value in today's market? If the deal goes south, do you want to be able to wholesale or be locked into retail to get out of it?

In the Armando Montelongo's book Flip and Grow Rich. He is the guy on Flip this HOuse! I was wondering how this works. Basically, I wrote it the way he explained it, so I haven't a clue.

He may have been able to do it around 2003-2004. There were a couple of banks in the mid west that were buying notes from simultaneous closes. That was back when wall street had an insatiable appetite for loans to securitize and it didn't matter what quality the notes were.
Then again he may be taking a little literary license

thought maybe he has connections and such too, so maybe not everyone can do this as he wants you to believe.