Buy And Sell Notes Apr 2026

The borrower has stopped paying. These are bought at deep discounts (often 30–60 cents on the dollar). The strategy here is "workout" or "liquidation": you either help the borrower re-perform, or you foreclose and take the property for a fraction of its market value. 3. The Power of the "Discount"

In physical real estate, you check the roof. In notes, you check the . buy and sell notes

The borrower is paying on time. Your goal is passive income. You buy these at a modest discount to the face value to achieve a yield higher than traditional bonds or CDs. The borrower has stopped paying

If a borrower files for Chapter 13, a judge could potentially "cram down" the interest rate or terms of your note. The borrower is paying on time

If you buy a "second" mortgage and the "first" mortgage forecloses, your investment can be wiped out completely.

If the borrower pays off the loan early (due to a sale or refinance), you receive the full $100,000 balance, handing you an immediate $20,000 "windfall" gain. 4. The Due Diligence Checklist (The "Paper" Inspection)

Sellers usually offload notes for the "Three Ds": They might need cash for a medical emergency, a new investment, or they are simply tired of "clipping coupons" and want to exit the management of the debt. 6. The Risks