Note brokering is a highly lucrative business for people with the right knowledge and resources. But beware of scams. Some online note exchanges are not real and may be created by seminar hucksters.
These sites offer lists of “note buyers.” But what really happens is that the new course graduate calls one of the note buyers on the list, which leads to a daisy chain of brokers.
It’s a great way to make money
Brokering notes is an excellent way to make money, but only if you’re prepared for the long haul. To be a successful note broker, you need to understand the real estate market and stay abreast of new regulations. It also helps to have a strong network of investors and banks.
You’ll also need to have the necessary education and training to become a professional note broker. This includes taking courses in real estate law and investments. A bachelor’s degree in finance or economics is often a good starting point. You can also take a course in note brokering, although many of these are designed to make the seminar promoters rich.
The first step is finding buyers or investors for the notes you’re selling. This can be done by searching for properties that are being sold as owner carry backs or by scouring classified ads and real estate publications for seller-carryback opportunities. It’s also helpful to scour the “for sale by owner” section of online real estate websites.
It’s a low-risk business
Note brokering is a business that can be done from the comfort of your home. It is not a get rich quick scheme and does require significant networking and finance knowledge. Those interested in becoming a note broker should consider taking college level finance courses to obtain the requisite education. Additionally, one should also look into working as a loan note broker for a period of time to gain hands-on experience and a good understanding of the industry.
Many seminar hucksters make this claim to lure stay at home moms and retirees into taking their high-priced notes brokering courses. It is an untrue claim because a successful note broker will need to be available during normal business hours every day of the week. Moreover, the note broker will need to spend a lot of money on marketing. In comparison, a McDonald’s franchise has the benefit of millions of dollars in national advertising and 40 years of name recognition.
It’s a one-person business
Despite the claims of some seminar hucksters, brokering notes is not a one-person business. To be successful, a note broker must be available all day and work hard. He must communicate with title companies, attorneys, investors, banks, appraisers, and escrow agents. Additionally, he must accommodate his note holders on nights and weekends.
Becoming a note broker requires a lot of marketing and ninja-like negotiation skills. But the most important thing is to be able to find buyers or investors for your notes. You can do this by finding the right investors for your notes or by using your existing sphere of influence.
The best way to learn how to broker notes is by taking a course dedicated to the subject. However, be aware that many online courses are designed to make money for their founders. Therefore, it is important to research the legitimacy of these courses before signing up. Additionally, you should avoid websites that promote themselves as note brokers. These are often just a marketing device to attract unsuspecting brokers.
It’s a high-profit business
In its simplest form note brokering is connecting people carrying some type of promissory note or letter of credit to end investors willing to buy the notes. These brokers are paid a fee for their services. Some of the most common types of notes are real estate and business notes but there is much more to this business than that. The key is finding the buyers. This can be done with a simple online search.
The hottest market is representing institutional sellers like Banks and credit unions in the disposition of their non-performing or distressed mortgage notes. In this role, a broker can earn an unlimited income.
Some brokers have been offered upfront money in the form of forgivable note to entice them to join a firm. Although it is technically a loan, the broker-dealer is able to recover the amount over time by marking up their proprietary solutions. This is a reflection of the industry shift that values recurring revenues over transaction fees.