Frequently Asked Questions (FAQ's)
Questions About Notes and Cash Flows
What is a cash flow? – A cash flow is an income stream that an individual or business has, where they are receiving payments. These payments can be coming from any of a large number of different sources, the most widely known and used is the private real estate note or mortgage note.
What is a real estate note? – A real estate note is a promissory note created at the time of a sale. It is typically secured to the property through a security instrument, i.e. trust deed, deed of trust, security deed or mortgage.
Why do investors buy private real estate notes? – Investors are looking for safe investments that will earn them higher yields than they can earn in the bank yet safer than the stock market. It has long been established that real estate continues to go up in value as a general rule, so a private real estate note fits the bill for a secure investment.
How can ProTask Funding help me if I want to sell a real estate note? – ProTask Funding has a strong focus on educating and helping businesses and individuals to understand how the expanding cash flow industry can help them to solve their cash flow problems. If you have questions as to how you might be able to solve a cash flow problem for your business, we are at your service to give you a free consultation. Don't wait any longer. Call us now and start on the road to getting your cash flow back where it needs to be to make you a successful, thriving business or family.
How long wil it take to sale my note once you have an investor? -It will typically take 2 - 3 weeks to be able to fund the purchase of most notes once we have securred an investor and have received the necessary documentation from you to open an escrow on that purchase. The quicker you can provide that information to us, the quicker we will be able to close the sale of the note, however the more people involved in the sale of the note and the more complex the note, the longer it will take to close the sale of the note.
Can I sell my real estate note if it has some problems? – Most real estate notes, even with some problems can be sold. On way and investor my purchase your note is by purchasing a partial portion of your note to get you cas now. If he is comfortable with your note after he has purchased the partial, he may decide to purchase the remainder of the note at a later date.
What is a partial purchase of my note? – A partial purchase of your note might consist of purchasing one year of the note's payments to lessen the investors risk with a note that has some problems. It might be longer term that 1 year depending on the note. An investor might structure the purchase into several disbursements to help you accomplish your goal. An investor might purchase just a portion of each payment allowing you to get the cash you need now but continue getting a monthly income from a portion of the note. There are many ways to work with notes that have problems that might allow you to get the cash you need now.
How much can I get for my note? – That depends on the quality of your note. Before we can tell you how much you can get for your note, we need to know exactly what you have to sell. What type of collateral is backing up your note and details about the note and the note payor.
Why do you need to know the detail of my note? – You would buy a car without knowing the as much about the car and you can, right. If I tell you I have a red car for sale you would still want more detail. Investors want to know that when they lend out hundreds of thousands of dollars or even ten of thousands of dollars that their money is going to be safe. Without all the details they can't make that kind of decision.
Why does an investor discount the note when he buys it? – If an investor wanted to just lend money in the real estate market he could work with a bank or mortgage company and screen the payor's ability to pay, current employment and work history, accept only payors with higher credit scores, etc. With private mortgage notes the investor can't do any of that he has to take the note the way it was created. This causes extra risk since in many cases there wasn't even a credit report run on the payor. The investor has to compensate for that extra risk by discounting the note. In turn the investor give you a second chance to sell the property for cash.