Is It Better To Buy Mortgage Notes From A Private Seller Or A Bank?

by Dec 15, 2021

Most first-time investors in the real estate industry start with traditional methods, such as house flipping, rehabbing, or managing rental properties. They might even invest in commercial real estate like apartments, storage units, or strip malls, too.

In these traditional methods, investors usually purchase the property, renovate it, and then rent it out or sell it. Depending on how these assets are managed, it’s no secret that they can quickly become great ways to generate income, receive tax benefits, and build wealth. But did you know there are better ways to generate passive income than just these traditional methods?

That’s right, you’ve guessed it–mortgage notes! Mortgage notes offer many benefits and present unique opportunities to amass passive income. Additionally, mortgage notes also offer higher-than-average returns for real estate investments. If you’re interested in mortgage notes investing in NY, you must be wondering where to buy them.

Well, there are two main ways you can buy mortgage notes–from a private seller or from a bank. Now which is better? Keep on reading because we will tell you everything you need to know about investing in mortgage notes.

Where Should You Buy Mortgage Notes?

Right off the bat, you should know that buying mortgage notes from banks requires more effort than buying notes from brokers, hedge funds, or marketplaces. On the other hand, a private mortgage note is held by a home or property seller. In these instances, the seller may own their property outright and can offer the buyer their own mortgage deal.

If you don’t want to buy mortgage notes through crowdfunding alongside other investors, you can choose to buy from private sellers. With private sellers, you can get passive income without spending too much time and effort learning the note investing business.

Real estate investors use private money loans to buy and rehab properties. Private money, also known as hard money, allows real estate investors to close quickly with cash, whereas traditional bank financing can be hard to obtain for some properties and often takes a significant amount of time to close.

For the lender, they get to originate their own loan, set their own lending terms, and get to know their borrower and the collateral in advance of lending. The fact that your borrower is a real estate investor and not an owner occupier has a number of distinct advantages over buying performing notes or buying through banks.

Mortgage note investing is owning real estate without property management. You essentially own the property without functioning as a landlord where you’re left with the task of paying the investor instead of the bank. However, it is definitely an inexpensive way to invest in real estate as it can be a way to build passive income.

There are many ways to start investing in mortgage notes. However, keep in mind that all investments carry some form of risk, so make sure you understand the risk factor before investing.

Convinced that mortgage note investing is for you? Consider buying distressed mortgage notes in New York for passive income. Luckily for you, you’re on the right page! Look no further than Melanin Homes for your real estate mortgage notes needs.


Discover positive cash flow investment properties with high returns when you choose to be a buyer under our preferred buyers’ list here at Melanin Homes. Melanin Homes is a real estate solutions company. We are full-time investors and specialize in finding assets with high competitive returns that you may not be used to hearing. Here at Melanin Homes, we deliver on our promises.

With our proprietary system we find unique opportunities to invest in real estate through privately held mortgage notes, first trust deeds, contract for deeds, and land contracts. We then pass these deals along to our preferred buyers who are looking for great competitive returns or positive cash flow. Be one of them by investing in mortgage notes in New York today.

Interested in investing in real properties in New York City? Look no further because you’ve come to the right place! Here at Melanin Homes we offer a wide-variety of real-estate solutions for all of your property needs! We have mortgage notes for sale to make investing in real estate easy as one, two, three.

So, are you interested in getting on our Preferred Buyers List (it’s free) so you can be notified of each new asset or investment property available? Reach out to us here (347) 809-5811 today!

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