Some Frequently Asked Questions that Note Holders Are Wondering
Have a few questions? A lot of people do which is why we call them frequently asked questions. So, here’s a quick collection of some of the most frequently asked questions we get from noteholders… with our answers next to them. If you still have a question don’t hesitate to shoot us an email through our contact page (or give us a call). You can also checkout the very basic concept of a promissory note in a TikTok short at the bottom of the page.
Q: Where can I sell promissory notes?
A: You can sell promissory notes to private investors, note brokers, or professional buyers like We Buy Notes Lansing. We specialize in offering fast, fair cash offers for mortgage-backed notes.
Q: Is a promissory note worth anything?
A: Yes, a promissory note has real financial value, particularly if it’s secured by real estate and the borrower has a reliable payment history.
Q: Can promissory notes be sold?
A: Yes, promissory notes can be legally sold or transferred to another party. This allows note holders to receive a lump sum instead of waiting for payments.
Q: How much can you sell a promissory note for?
A: The sale price usually ranges between 60% and 95% of the unpaid principal balance, depending on the risk profile and terms of the note.
Q: How much is a promissory note worth?
A: A promissory note’s value depends on interest rate, payment terms, borrower’s creditworthiness, and whether it’s secured or unsecured. Secured notes backed by real estate typically hold more value.
Q: Will a bank accept a promissory note?
A: Banks generally do not accept promissory notes as direct payment. However, they may hold or issue them as part of a loan or financial agreement.
Q: Can a promissory note be cashed?
A: Promissory notes are not cashed like checks. Instead, they are paid according to the agreed schedule or sold to a third party for a lump sum.
Q: Who buys unsecured notes?
A: Unsecured notes are typically bought by high-risk investors, specialized lenders, or companies focused on distressed debt acquisition.
Q: Can you go to jail for a promissory note?
A: No, failing to pay a promissory note is a civil issue, not a criminal offense. However, legal action may be taken to recover the debt.
Q: What happens when a promissory note is sold?
A: Ownership of the debt obligation transfers to the new buyer, who then collects future payments from the borrower.
Q: Do banks sell promissory notes?
A: Yes, banks often sell promissory notes to other financial institutions or investors, especially when offloading non-performing loans.
Q: How to make money with a promissory note?
A: You can earn by collecting interest over time or selling the note for a profit if its value appreciates or the borrower has strong credit.
Q: How much value does a promissory note have?
A: The value depends on various factors like remaining balance, interest rate, loan-to-value ratio, and borrower history. A well-performing note can be worth close to its full unpaid balance.
Q: Who owns a promissory note?
A: The current holder of the note—the individual or entity that purchased or was assigned the note—legally owns it and has the right to receive payments.
Q: What is an allonge to a note?
A: An allonge to a mortgage note is a fancy phrase for addendum. It’s a formally recognized and legally binding extension of the original document.
Q: How do I sell a promissory note?
A: Selling a promissory note is easier than you think. All you have to do is work with a company who buys promissory notes in your state.
Q: Why should I even consider selling my note in MI?
A: A couple of reasons really. First off, your investment is trapped inside of those future note payments. So if you need cash to pay off debts, make a new investment, or for any other reason… selling all or part of your future note payments may be a great option. Second, selling all or part of your future note payments doesn’t mean you’re losing any principle. In fact, there may be ways we can structure the purchase of your note payments so you regain all or most of the principal owed you in the note. Ask us how and if your note qualifies ››
Q: Why should I sell my note to Elite Investment Partners LLC?
A: Great question! In addition to the fact that we offer some of the highest prices and can close fast, is that after we buy your note payments…
- You won’t have to worry about admin tasks like IRS income tax reporting requirements, IRS tax liens against the payor, collecting payments, etc.
- You won’t have to worry about borrower issues like bankruptcy, divorce or death, or defaulting on your note. (that’s for us to worry about)
- You won’t have to worry about the destruction and devaluation of the property/asset.
- You won’t have to worry about your note being assumed by another borrower who turns out to be a deadbeat.
Q: How do you come up with the price to offer me for my note?
A: Ultimately when we look at a note to buy here in Lansing MI or any other state we buy notes in… we look at a few factors.
1) The note: Payment amount, loan terms, # of remaining payments.
2) The asset: A bit about the property or asset backing the note. If it’s a quality asset, the note will be worth more.
3) The borrower: The wording on the note, credit profile, etc. With all of that, we’ll figure out the value of the note and present an offer that’s a discount on that value.
Once we know the situation well, we’ll make you an offer. This offer is based on the value of the note, the risk of us receiving the payments from the borrower, and the quality of the security backing the note (real estate, etc.). You can expect to receive an offer that is a discount on the full remaining payment value based on the factors above.
Q: Are there any fees or commissions to work with you?
A: There are NO fees or commissions to work with us. We’re MI based note buyers and we buy and sell notes with cash… we don’t broker notes or charge the note seller any fees or commissions. In fact, you won’t pay any costs at all during the whole process… we pay every cost associated with the transaction. You just get access to the cash trapped in your note without the hassles or costs that goes with working with a note broker to sell your note payments.
Q: Is there any obligation when I submit my info?
A: No obligation at all. Once you tell us a bit about your note, we’ll take a look at things, maybe set up a call with you to find out a bit more about the borrower or to confirm some details, and make you a fair cash offer that’s fair for you and fair for us.
The whole time it’s 100% your decision on whether or not you’d like to sell your note to us. Once you get our offer we encourage you to research it, shop it around if you want to. No pressures. No hassles.
Wondering about additional frequently asked questions. Contact us and we’ll answer them for you.
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