Examples of various ways you can sell your note

Listed below are some examples of the various ways you can sell a note generated from the sale of real estate. The payment streams can be secured by real estate contracts, mortgages or deeds of trust. They can be seasoned or “green”, and in some cases investors can purchase notes less than one year old.

Selling your note will generate a specific yield or return to an investor. Yield requirements are based on type of property, location, equity, position and time remaining to collect the payments. As in any investment, yields are risk-sensitive. (Risk factors from lowest to highest: Single Family Residence/4-plex, Mobile Home plus Land, Improved Land, Commercial, Unimproved Vacant Land.)

The time value of money is an integral part of the yield calculation that goes into making an offer to the note seller. Each payment has a specific value that diminishes rapidly the longer the investor needs to wait for it; in other words, the longer it takes to receive the payments, the less those payments are worth. Therefore, long-term contracts of 20 to 30 years must be severely discounted in order to produce a reasonable yield.

It is important to remember that an investor is buying only the payment stream, not the property. The property only secures the payment stream. Do not assume that, because a property has high equity, a strong buyer, or has been tremendously improved, it will result in more cash to the note seller (lower yield to the investor). It only ensures a more secure investment.

Selling a note, either seasoned or green, on a single family residence

$75,000 Sales price (free and clear property)

-25,000 Down payment by buyer

$50,000 Contract, 1st position, @10% int., 15 yrs, $537.30/mo, no calls

Cash value of contract: $39,348 (14.5% yield to investor)

Cash value if a five year call is added and the same amortization schedule is retained. The balloon due in five years would equal $40,658.

Cash value (with balloon): $42,614 (14.5% yield to investor)

Selling a note after closing, but seller splits the balance owed to him into two contracts because he doesn’t need all the cash or wants to avoid the bigger discount.

$75,000 Sale price (Free and clear property)

– 25,000 Down payment by buyer

$50,000 Balance: Split into two notes

Note 1) $25,000 1st pos, @10%, $268.65/mo, 15 yrs, 7 yr call

Cash value of note 1: $21,796.87 (12.5% yield to investor)

Note 2) $25,000 2nd pos, @8%, $238.91/mo, 15 yrs, no call

Seller keeps note 2 and collects payments monthly.

Total proceeds to seller:

$25,000 Down Payment from buyer

+21,796 Proceeds from sale of note 1

+25,000 Face amount of remaining contract

$71,796 proceeds plus interest on balance

Total income: $25,000 + $21,796 + (180 pmts x 238.91) = $89,799
Partial Purchase of a contract, seasoned or new.

Contract: $50,000, 1st pos, 10%, $537.30/mo, 15 yrs, 7 yr call of $35,409

Sale 1: Sell first 60 of the 84 payments due; remaining payments and balloon revert back to seller after 60 payments collected by investor.

$22,836 (14.5% yield to investor) Cash value for 60 payments

+40,658 Still owed to seller

$63,494 Proceeds plus interest on balance

Total income: $22,836 + (23 pmts x 537.30) + 35,409 = $70,603

Sale 2: Sell all the payments (84) plus a portion ($17,500) of the balloon due.

$34,634 Cash value of partial

+17,909 Paid at balloon due date

$52,543 Proceeds

Sale 3: Seller keeps payments but sells the future balloon payment for an immediate lump sum of cash.

$12,911 Cash value of balloon (14.5%)

+44,596 Proceeds of 83 payments ($537.30 x 83 pmts)

$57,507 Proceeds

Partial sale of a payment.

Sell a portion of the total monthly payment, such as in cases of divorce, family estates, cash flow needs, etc.

Contract: $50,000 1st position, 10%, $537.30/mo, 15 years, no balloons.

Sell $250.00 of each monthly payment for 15 years. Seller keeps $287.30 per month plus receives lump sum of cash up front.

$18,308 Cash value ($250/mo)

+51,714 Proceeds of 180 payments x $287.30

$70,022 Total proceeds

Financial Planning- Sell short-term contract(s) to apply to other long-term debt.


Proceeds from a home sale:

$80,000 Sale price ( Existing $40,000 1st mortgage on the property)

-20,000 Cash down payment

-40,000 1st mortgage assumed by buyer

$20,000 Contract, 2nd position, @9%, 10 years, $253.35/mo, no balloons. Total of pmts: 120 x $253.35 = $30,402


The seller now intends to make a NEW PURCHASE:

$100,000 Purchase price

– $20,000 Cash down payment, 80% LTV

=$80,000 Mortgage @10%, $702.06/mo, 30 years, no balloons. Total of pmts: 360 x $702.06 = $252,741

Sell Contract (Described in STEP ONE) for cash:

$16, 006 proceeds (14.5% yield to investor)

Add proceeds to down payment:

100,000 purchase price

– 36,006 NEW down payment, NOW 64% LTV

$63,994 Mortgage, @10%, $561.59/mo, 30 years, no balloons. Total of pmts: 360 x $561.59 = $202,172


Savings to note seller:

$252,741 Total of pmts on original new purchase

-202,172 Total of pmts on REVISED “new” purchase

= 50,569 Gross savings

– $30,402 Income lost due to sale of Contract

=$20,167 Total savings to note seller

Advantages of this transaction:

Saves note seller money

Lowers exposure to lender by improving LTV

Provides additional lender funds to loan to other customers

Removes note seller from the “lending” business and all associated problems (foreclosure, late payments, the need to re-assume first mortgage to protect interest, depreciation of property through neglect, market, etc., or estate problems resulting from a deat

Financial Planning example #2- An individual with existing mortgage and an owner carryback as an asset:

Existing home mortgage:

$30,000 balance, @9.5%, $398/mo, 115 pmts remaining (115 pmts x $398 = $45,770)

Owner carryback:

$10,000 balance, @10%, $200/mo, 65 pmts remaining (65 pmts x 200 = $13,000)

The individual in this example sells owner carryback for $8859 to yield investor 15%…

Then, applies proceeds to the existing mortgage as follows:

$30,000 mortgage

– $8859

$21,141 Is resulting new balance and reduces remaining term to 69 months


Original balance:

$45,770 (115 x $398)

– 13,000 (65 x $200 Was being applied to mortgage payment)

=32,770 (Would have been the total paid)

New plan:

$27,462 New total paid (69 x $398)

Resulting new savings- $5,128

If you require guidance, or would like to direct questions, comments, inquiries, etc. to us, please contact us.

NoteInvestors.com Quickread…

elite-cash-flow-networkOWN YOUR OWN CASH FLOW BUSINESS FOR UNDER $300

Note Investors’ Elite Cash Flow Network Support System is a complete “BUSINESS IN A BOX” that will get you started in your own Cash Flow business, even if you have very little or no money to start with.

When you join the The Elite Network, you get everything you need to succeed, including jump-start orientation, personal one-on-one support, the Cash Flow Industry’s most powerful training programs, Master Cash Flow Specialist Certification, ready-to-use marketing kit, direct access to cash for your transactions and much more within a super-affordable package.

Read All About the Elite System


NoteInvestors.com Quickread…



NoteInvestors.com Quickread…



NoteInvestors.com Quickread…

Frequently Bought Together

“Building Wealth Together” + Superearnings Master Cash Flow Specialist Certification Course- AVAILABLE TODAY VIA INSTANT DOWNLOAD FOR JUST $39.95 EXTRA (A $40 SAVINGS OFF THE REGULAR $79.95 PRICE)

Now you can start your note business with the “Building Wealth Together” program and also earn Master Cash Flow Specialist Certification (which carries National recognition and will help you do even more business) through the Superearnings program. Using these two programs together will greatly increase your earning potential, and, if you act today, you will SAVE substantially by ordering both.



Act NOW and take advantage of this Extra Special Bonus OfferAvailable HERE ONLY (nowhere else) For a VERY limited time at a GREATLY discounted price…

The master note experts at NoteInvestors.com are extending this offer (for a very limited time) of their best-selling note marketing program as an OPTIONAL BONUS that will help you to get the most out of the “Building Wealth Together” program :

how-to-turn-90-percent-of-the-people-who-wont-sell-their-notes-into-big-time-cash-profits“How To Turn 90% Of The People Who Won’t Sell You Their Note Into Big Time Cash Profits” Set up a steady stream of business for yourself– far into the future– that will keep you brokering notes to Charter Financial for years to come! This note-finding program will teach you how to “Super Charge” your note business.

Save a whopping $50 on this program when you order “Building Wealth Together” NOW… (Regular price $79.95) that’s right– our “FLAGSHIP” marketing program for only $29.95.

AVAILABLE ONLY HERE AT THIS WEBSITE. Click HERE to learn more about the program.

(Just click the “ACCEPT” button during Checkout to add to Cart.)


The NoteInvestors.com marketing system shoots down your competition. The methods and strategies raise you to a high level… proving to noteholders that you’re totally different from the “run-of-the-mill” competition. The marketing system is powerful. You can actually mail to a list that’s been mailed several times by other note brokers and get money-making results.

Remember, you must learn how to do one thing well– how to find the notes that you will broker to Charter Financial.

Don’t wait. Act NOW AND SAVE.THIS OFFER WILL NOT BE REPEATED. To take advantage of this UNPRECEDENTED special offer, just click the “ACCEPT” button during Checkout to Add to Cart.
Our Guarantee

30 Day Unconditional 100% Money Back Guarantee! Our programs will help you succeed. You MUST be positively 100% satisfied or we will refund you in full, no questions asked.