We Are Promissory Note Buyers

Promissory Notes Can Be Less Than Promised

A promissory note is a form of debt that companies sometimes use, like loans, to raise money. The company, through the notes, promises to return the buyer's funds (principal), and to make fixed interest payments to the buyer in exchange for borrowing the money. Promissory notes have set terms, or repayment periods, ranging from a few months to several years.

Promissory notes also offer a credit source for companies that have exhausted other options, like corporate loans or bond issues. A note issued by a company in this situation is at a higher risk of default than, say, a corporate bond. This also means the interest rate on a corporate promissory note is likely to provide a greater return than a bond from the same company – high-risk means higher potential returns. (For more insight, see Corporate Bonds: An Introduction To Credit Risk.)

Many people sign their first promissory notes as part of the process in getting a student loan. Private lenders typically require students to sign promissory notes for each separate loan that they take out. Some schools, however, allow federal student loan borrowers to sign a one-time, master promissory note. After that, the student borrower can receive multiple federal student loans as long as the school certifies the student's continued eligibility.

So if you need to sell a Church note, retail shopping center note, motel note or other type commercial note, give us a call. We’ll get you a quote usually in 1 business day and will move very quickly to get you your lump sum of cash. So don’t delay. Call Us Today.

Promissory notes are instruments that allow people to lend and borrow money outside of normal channels based on the merits of the individual borrowing the money and the collateral they are putting up. In difficult economic times, people with less than perfect credit are finding that traditional lenders such as banks are becoming very particular with their lending guidelines.

Check with the SEC's EDGAR Database to see if the notes are registered. (Remember that most promissory notes are securities and have to be registered with the SEC and the state they are sold in, unless they are specifically exempt from registration under law.) Check with your state securities regulators whether the investment and the salesperson are in compliance with your state's securities laws.

Promissory notes have had an interesting history. At times, they have circulated as a form of alternate currency, free of government control. In some places, the officially currency is in fact form of promissory note called a demand note (one with no stated maturity date or fixed term, allowing the lender to decide when to demand payment). In the United States, however, promissory notes are usually issued only to corporate clients sophisticated investors. Recently, however, promissory notes have also been also seeing increasing use when it comes to selling homes and securing mortgages.

Lastly, many commercial promissory note holders don’t realize they can sell a portion of a note’s future payments for a nice piece of cash now. This lets the seller get some often much needed working capital for their business but it minimizes the discount they will have to take. It also allows them to treat their note a bit like a ‘piggy bank’, tapping it for cash on two or more occasions. Where else can you get a nice lump sum of cash for your business without the hassle of applying for a bank loan, every business person’s nightmare nowadays? Also, we do not purchase business notes backed by non-real estate assets.

Mortgage Notes

That’s where we come in. We specialize in the purchase of commercial seller financed real estate notes. As much of our business is as commercial mortgage buyers, we understand the commercial side of this business. This not only means we nearly always close on a note sale we quoted (and at the quote amount unlike many note buyers in this business), but we close very quickly, getting you cash in days instead of weeks or more. Also, unlike residential payment buyers focusing on residential owner financed promissory notes and dabbling in commercial notes, we close and close quickly as we do our own property evaluation initially through the web, and lastly through an onsite visit. One other pretty unique specialty that we have is that we are interest only commercial note buyers so unlike just about every commercial note buyer out there that will not buy a real estate note that in interest only (not amortized), we can help you sell an interest only commercial note as well as an interest only residential note.

Definition Of Buyer Promissory Note

Pragmatically speaking, a commercial property that is generating income becomes much more attractive to potential buyers, AND to potential renters. Part of the value of these types of properties IS how they look to both buyers and renters. Appearance matters. This is NOT news…but it is frequently ignored. It does not hurt to analyze what could make any piece of real estate more viable from both a business standpoint and from the standpoint of attracting customers and buyers. While it’s challenging to try to guess what will attract customers, all businesses that succeed HAVE to figure it out or die trying. Investors, by definition expect to make money. If they want to sell a commercial property they need to make it look good so they can fulfill this worthy goal. Lastly, if you are considering converting your commercial property to sell it, go to our article on converting a commercial property to increase it’s appeal.

Thinking about selling your commercial property? Commercial properties have many of the same challenges that residential properties have when they go to resale. They may be vacant, rundown and siphoning off $$$ from their owners, rather than making MONEY. Commercial properties, by definition are expected to make money for their owners, regardless of whether the owners are institutional or individual investors. If factors do not come together in an advantageous way a property could sit empty for years while it bleeds cash away from investors.

Scams involving promissory notes rob investors of tens of millions of dollars. The promise of high guaranteed rates of interest (some as high as 26 percent) make these come-ons particularly attractive in today’s low-interest rate environment.

Using A Promissory Note To Purchase A Home

Ask how the company issuing the notes will generate the returns to pay you your interest. Find out what part of the money that the company will be getting will be used up by marketing and promoter's costs, which may hurt the company's chances of paying you back.

Know that a salesperson cannot guarantee a particular return. Even if the note has a fixed interest return, the investment may not pay that amount—or return your principal—to you. Moreover, the seller may say the notes are insured, but not mention that the insurer may not be legitimate—and outside the US and beyond the reach of our laws.

Note Buyers

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Although those selling them may not know or admit it, these promissory notes are usually securities and must be registered with the SEC or the state they are sold in—or they must have a specific exemption from registration under the law. If the note is not registered, it will not be subject to review by regulators before it is sold, and investors have to do their own investigation to confirm that the company can pay its debt.