Where To Find Mortgage Notes For Sale

Top 10 Note Sources

You can find mortgage notes in a variety of ways. Some techniques require more work and knowledge than others. Here are the 10 most common methods to locate real estate notes.

(1) Craigslist

Craigslist is a great place to find private sellers of mortgage notes. These are private sellers who own notes and qualify their own borrowers, similar to how banks work. 

First, identify your preferred city and state.  Start by searching the “real estate for sale” section. Look for terms such as “owner financing”.  Contact the seller and ask if they would be interested in selling the note associated with that property.

(2) Word of Mouth/Brokers

Note brokers can be a fabulous source of notes.  You just have to find an experienced broker who can bring value to the deal.  What is a note broker?  They are basically the middle-man the transaction. They locate notes and connect sellers and buyers for a fee.

(3) Investors

Good old fashioned networking with other investors can be an awesome note source. You never know if another investor in your area or in a nearby meet up group is looking to unload an unwanted mortgage note.

(4) Accountants

Accountants, financial planners, CPAs, bookkeepers, and other tax professionals interact with a variety of clients – in particular those who are looking to sell mortgage notes and real property. 

It’s all about networking in order to find the right accountants or CPAs who can provide leads.  You’ll most likely have to provide some education to many of these professionals as they may have limited knowledge about the note industry. 

Get around the knowledge gap by locating financial professionals through real estate investing groups.

(5) Attorneys

Getting lead from attorneys is one of the best ways to build a note portfolio. These professionals may not know what to do with mortgage notes as they are not seen as often as real properties. 

This is a relationship business. Reach out to real estate, divorce, probate/estate planning, and bankruptcy attorneys.  Contact them and let them know that you buy notes and can close quickly. 

Begin building a substantial database of attorneys as a resource to find mortgage notes.

(6) Realtors

(7) Hedge Funds

Buying notes from hedge funds is an option for investors with more money to invest. If you’re have limited capital, you can also broker a pool of funds to a dealer or another end buyer. 

Usually when working with hedge funds, it’s expected that you will purchase a large number of notes to buy. Look for hedge funds managers to approach. Connect with them at REIA groups, on LinkedIn, and professional real estate conferences.

(8) Online

Purchase notes from online sites generally command retail price, a higher price than you would pay from other methods listed here. You will also have more competition from other investors who are searching for solid mortgage notes.

Despite some of the drawbacks, there are many online platforms that can serve your needs – be it performing or non-performing notes.

(9) Rehabbers

Most rehabbers need financing for their deals – money can be a barrier to fix up a property.  Often, they are looking for short term loans.

Creating notes/loans for rehabbers and property flippers gives then the opportunity to get funding.  Rehabbers need to sell their properties fast and usually for greater than market value to recoup money. 

Lending money to flippers is a strategy to get a great yield on note and grow a lasting partnership!

(10) Note Servicers

Licensed loan servicers are companies that manage mortgage notes by collecting fees and communicating directly with borrowers for investors. Generally, they are not in the business of selling note selling notes.

However, note servicers do know who is looking to sell a note.  By building a good working relationship a note servicing company, specifically with an asset manager who directly handle cases, you’ll be able access information about who is looking to sell of a note.