Commercial Note Buyers
Buyers of Commercial Owner Financed Promissory Notes

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Selling a Partial Commercial Note

Unlike commercial bank note selling where it’s all or nothing, selling a commercial owner financed note with a mortgage or Trust Deed has a second option for commercial seller financed note holders. In the industry, it’s called Sell Commercial Note or partial commercial note buyers from the note buyer’s perspective. However, to note holders on commercial properties, this language can be misleading. The reason for the confusion is the fact that you really can’t sell a part or piece of a commercial real estate note. Think about it. How would you foreclose on a partial note in default, take a piece of the real estate securing the note? Sorry, just had to say that.

If a choice of closing locations is provided, the note holder should request to close the sale at the local title company. This allows the individual to leave the closing with the proceeds from the sale of the note. Some note holders offer this service at no charge, while others assign an independent title company to act as an escrow agent on behalf of the seller.

Sell Commercial Note

As this process reveals, selling commercial mortgage notes is not difficult but it does require some due diligence. Note holders should take time to gather the needed information and compare quotes from several buyers to get the best price. Following these steps results in a transaction that is fast, convenient, and financially lucrative.

The result is what I call “the funding gap”. Loans that fall into the funding gap are quality commercial mortgages that should be funded but, due to the turmoil in the credit markets, have been rejected. There are tons of great deals on the sidelines today, deals with top-notch sponsorship and plenty of equity. With the big banks largely out of the lending business, private mortgage lenders have stepped in to fill the funding gap.

Commercial Note Buyer

Private lenders, once referred to as “hard money” lenders, are privately held companies that engage in commercial mortgage lending for their own benefit. Privately funded commercial mortgages are, generally underwritten on the basis of equity and are typically not credit driven. Interest rates and points on private loans are significantly higher than those charged by banks and other large institutional money centers. Private mortgage lenders can make decisions quickly and fund loans in a matter of a-few weeks, rather than the several months it takes to close a conventional deal.

So, just how does someone “Sell Commercial Note”? It’s actually easier than you might think. You simply sell some of the future payments on the note. At the end of those payments (assuming all goes well), the note reverts back to the seller unless the seller wants to sell some more payments which I call treating your real estate note like a piggy bank.

The key element to this transaction is that commercial note buyers take the note’s security (Mortgage or Deed of Trust) in whole. When the note reverts back to the seller so does the security instrument. Voila!

Private commercial mortgage note buyers

Just like with residential owner financed note purchasers, commercial promissory note purchasers purchase the note at a discount. I’ve written an article on how commercial owner financed real estate note buyers purchase the note at discounts. I’ve written an article about the discounting on commercial notes.

Check it out. It covers the discounting process for commercial seller financed property notes. It could also help someone considering offering seller financing to move a commercial property faster. It also can help with structuring Sell Commercial Note for a better price should you ever need to sell your commercial mortgage or Deed of Trust and promissory note.

If you have any questions or want to sell a commercial note,

Give us a call at 1-877-655-5625 for Sell Commercial Note at Better Price.

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