You’ve done your research on investing in mortgage notes, but which seller do you trust? Is there a way to find out where to buy, and which note to buy? We know the struggle, and we decided to compile a detailed guide to finding the best mortgage note company to purchase from in New York that suits your needs. Read on and remember these quick tips:

Remember which notes can be bought

What note do buyers usually invest in, you ask? Investors looking to profit usually buy performing real estate notes through a private mortgage seller. However, ever since the economic recession of 2008, a rise in non-performing notes came about, and more people have been investing in them because the buy-in is much cheaper.

This is both a high reward and high risk decision, so you need to look for a trustworthy institution to invest with so they can give you sound advice before you make your decision. Usually banks or hedge funds have high volume pools of non-performing notes, so it helps to approach them first.

Here are the different kinds of notes you can choose from:

Commercial notes
Real estate notes
Seller financed notes
Private promissory notes
Business notes
Non-performing notes

Try free methods for finding notes

There are institutions you can approach, but some of them require payment first before granting you a consultation. Looking for free ways to search for notes is a better first step to take, especially if you’re still having doubts about investing at this very moment.

The best way to search for free is to go online and meticulously go through Search-Engine Optimized (SEO) articles (like this one!) that usually compiles trustworthy sources for search.

YouTubers are also on-point with reporting on the best institutions for their content, so it helps to browse this site, too. Craigslist, networking, and cold calls to institutions can help as well.

Be familiar with your options

There are lots of ways to buy mortgage notes out there. Here are some of the best sources we found.

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Create your own

Mortgage notes are not regularized by a governing body, so you can easily create your own and inform the market about them. Another term for this is seller financing or owner financing.

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Contact an online platform

What’s great about online platforms that sell mortgage notes is that they usually offer free consultations that can be done anywhere, whether you prefer to meet at their office or via Zoom. A word of caution though: although online platforms are easier to go through, this doesn’t mean they are more secure or less secure than other platforms. It helps to do your due diligence and research the platform first before contacting them.

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Go through a note broker

The good thing about contacting a note broker is that they can eliminate the need to search for you. Much like real estate brokers, note brokers send out a tape of assets to their clients, which is a highly detailed list of notes in spreadsheet form for them to bid on.

Lots of factors are attached on each note for potential bidders to assess, so you won’t have to search as much, but you will need to look over each note to see if it’s the right one for you. Factor in the fee for note brokers as well, which is usually 1-3% of the purchase price.

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Contact a bank or credit union

This is one of the most stable options to go through. Banks usually don’t want bad credit on their record, and will readily sell you performing notes from their list.

Closing Thoughts

An easy way to start purchasing mortgage notes is to find the kind of note you want and start approaching appropriate institutions. Make sure to ask them about their track record with generating passive income for their clients.

Should you decide to invest in an online platform while looking for mortgage notes for sale, contact us at Melanin Homes. We sell mortgage notes available in New York, and also offer free consultations for anyone who wants to learn more about investing in mortgage notes. Visit our website to contact us about your consultation today or to invest.