B. P. Funding and Investments, LLC
Call us: 210-481-0264
Interested in learning more about us?
Frequently Asked Questions
Why should I sell my mortgage note?
Usually, a promissory note is acquired instead of the cash desired during a real estate transaction. If retained long enough, many notes will eventually pay off. However, late payments, insurance liabilities, tax problems and foreclosure may soon plague some mortgage note holders. Even when these problems do not arise, many people would really prefer to have their cash now!
What other reasons are common?
Other reasons include: to pay off high-interest debts, to invest in a business, real estate or stocks, to pay tuition, to remodel a home, to buy a new car or boat, to settle an estate or to provide for relatives unable to service the mortgage. Some people didn't want to carry back the note in the first place, or have grown tired of collecting the monthly payments.
Let's say that I'm holding a mortgage with a balance of $50,000.
Why is the quote for the note less than $50,000?
The value of money decreases over time: a $100 bill will buy less in ten years than it would today. Several factors go into determing the discount for the note. The amount depends on the interest rate you charged the buyer, the term of the mortgage, the current prime rate, the value of the property, credut of the payor, as well as other factors.
Why should I sell my mortgage note for less than the balance?
Simple: The earning power of the decreasing mortgage balance is considerably lower than the earning power of a fixed sum invested at interest. For example, assume that the current balance of the mortgage you are receiving payments on is $25,000, at a 10% interest rate, with ten years of $330.38 monthly payments remaining. The total value to you if you were to receive all ten years of future payments is $39,645.60 (120 months times $330.38). However, if you accepted $22,000 today, and invested that amount in a 9% government bond (or other insured investment), the "simple" interest earned would be $165 per month. Ten years of interest would bring you $19,800, without touching your original $22,000 principal. Adding those up, the total value of your investment would be $41,800, which exceeds the $39,645.60 you would have collected from the monthly payments! Furthermore, if you sell, you have a guaranteed income when you invest in insured, fixed rate investments. A mortgage note is only a promise of future payments that may, or may not, appear. [P.S. When a note is paid off, there's no more income. If, however, you exercise the cash now option, your principal and interest could remain with you forever!]
Will I incur any "out-of-pocket" expenses?
Ordinarily not.
When I convert my note to cash, how will it affect the person(s) paying me?
It will not. All the terms and conditions set forth in the original note and mortgage remain in force. The only change will be to whom and where future payments are sent.
How long will it take to receive my money?
Generally, you will get paid the same day that the transaction is closed. Payment is made at closing, when all documents have been signed and recorded. How fast it will take to do the due diligence to get to closing generally takes three to four weeks.
How will I be paid?
Your payment will be made by certified check from a major financial institution or wired to an escrow account. It really depends on how the transaction is closed . We can close through overnight mail or third party (title company or lawyer's office)
What is a Simultaneous Closing?
Simultaneous closings can benefit the buyer and seller. This works great when a seller has the opportunity to sell a property with owner financing since his/her buyer is not able to secure bank financing. You will be able to get the full appraised value as the sales price, which you would not normally get if your buyer could qualify for bank financing. We would then purchase this note from you at a price that you would normally have sold it for in the first place. You can close on the sale of the property and at the same closing (simultaneously) we will purchase the note from you. You leave the closing table with all your cash and your seller would make all payments to us.
As an example, let's say you have a property that appraises for $100,000 that you would sell for $80,000 if a cash buyer came along. You can sell the property with an owner financed note for the full $100,000 and at closing we would normally be able to pay you in the range of $80,000 at the simultaneous close as described above. Your buyer would buy the property with a note to you that we would buy from you at the same closing. However, lets be honest the market has changed in the last couple of years so if you are creating a note for the sole purpose of selling it please call before creating.
Will you buy second or third mortgages?
Yes we have bought second position notes but buying criteria is more strict. The position of the mortgage is not as important as the "loan-to-value" (LTV) ratio. If the note seems to be a good risk, we'll buy it.
My mortgage has a balloon payment at the end of the term. Is that OK?
Yes! We buy balloons, too. Sometimes we will suggest extending or popping the balloon before we buy it.
Do you buy interest-only mortgage notes?
Yes!
Will you buy a new mortgage, or does my note need to be "seasoned"?
Yes, we buy new mortgages. (A seasoned mortgage is one that has been partially paid down, giving a history of how payments have been made.)
Do you buy notes from any state?
Yes!
Can I sell a portion of my mortgage note?
Yes. In some cases, you may require only a specific amount of cash to make a purchase, handle an emergency, pay off a loan, etc. If you had 200 payments remaining, you could, for example, sell just the next 60 payments for the amount needed. After five years, the payments would revert back to you.
Do you limit the size of the notes you buy?
No. Any size is OK if the "Loan to Value" (LTV) is favorable.
What can I expect when I call or correspond with your office?
We treat every client with the respect and fairness that we expect to receive ourselves. We ensure that all parties involved are happy!
Sell your private real estate notes or cash flow notes today, and get the cash you need now
