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How to Sell a Mortgage Note

By David Austin and Barry Goldberg

Are you receiving a regular cash flow or income stream, whether from a:

•  real estate note or mortgage,
•  business note,
•  structured settlement,
•  inheritance, or
•  lottery winnings?

You can get a lump sum of cash now and be done with the monthly payments. However the best choice is not always to sell the whole thing. How much cash do you really need now, and why do you want to get rid of a valuable asset that provides you with regular cash flow.

Especially in today’s market, most people don’t realize that they can sell only part of the asset, or so many number of payments. They can sell, say 60 payments. When the 60 payments are up, they get the asset back and they start receiving the payments again. There will still be a high value on the note. So the owner can receive a lump sum of cash for part of the asset, and then receive the asset back with a high balance remaining.

The question then becomes:

Why are you selling?

How much cash do you really need right now?

Be honest with this last question and it can change your experience of deciding to cash out of a valuable asset like a payment stream. What will you do with the cash you receive is the question you should be thinking about.

Full post as published by Cash Flow Solutions Blog on May 28, 2008 (boomark / email).