Saturday, November 1, 2008

Note Brokerage Expanding

An outgrowth of the commercial/investment real estate industry is the boom in note brokers, specifically those who find willing buyers and sellers of real estate notes.

I can't tell you how many times in putting together a deal that the seller has been asked whether they would, if the property buyer is financially strong enough, consider providing a second mortgage to help make the deal happen. The initial response is, "no." But they don't realize that note has value, and can be sold down the line to another investor who wants income.

The most fundamental job of the real estate note broker is to introduce the seller and buyer to each other. But not always. Often, a commercial real estate agent knows of investors who want to sell a note. In most cases, note brokers charge an introduction fee. One of the greatest advantages of real estate note brokers is that they provide and process all the paperwork required for a smooth transaction. In addition, real estate note brokers charge a small fee for doing the paperwork for you.

So for both investors and property sellers who have been waffling about whether to carry a second mortgage to make a deal happen, consider that there is a vibrant and healthy industry putting together buyers and sellers of notes.

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