NotesDirect.com is an online trading platform where investors of real estate Notes and REO properties can:
- Search assets available from multiple sellers
- Place a purchase order on one or more notes
- Close the transaction electronically
A real estate note is a debt instrument also known as a promissory note. It is an obligation to pay backed by real estate as collateral.
A Mortgage or Deed of Trust is recorded to secure the lien against the property. A Real Estate Contract or Contract for Deed may also be used as an alternative financing method.
Owning property for investment comes with the headaches of being a landlord. When you own the note, you become the bank leaving the responsibility for taxes, insurance, and the 3 T’s (tenants, toilets, and trash) to the property owner.
Absolutely! Flexibility is one of the great advantages of this investment. Notes can be bought inside or outside of a retirement account.
In fact, a vast majority of private investors take advantage of the tax savings offered through a Self-directed IRA, ROTH, Solo 401k, or SIMPLE plan. The purchase is coordinated through your account administrator using their Direction of Investment (DOI) form and process.
The terms of the purchase are spelled out in the Purchase and Sale Agreement (PSA). At closing, the Promissory Note is endorsed to the investor (also referred to as an allonge). An Assignment of the Mortgage or Deed of Trust is also executed and then recorded at the county courthouse. These documents are provided for the investor through the NotesDirect platform.
NotesDirect is a listing service for:
- 1st and 2nd position loans
- Seller financed notes (including Contracts For Deed)
- Performing notes
- Non-performing notes (NPN or NPLs)
- Real Estate Owned (REO)
Think of NotesDirect as an MLS style listing service for private mortgage buyers! You can search cash flows for sale based on:
- Asset Type
- Property Type
- Lien Position
- Last Valuation
- Current Unpaid Principal Balance (UPB)
- Interest Rate
- State/County
You can further sort search results by listing price, listing date, and location
Performance refers to how well the payor has been at keeping payments current on the note. Assets are divided into three main categories for search purposes as follows:
- Performing Notes – payments are either current or less than 120 days delinquent.
- Non-Performing – payments are delinquent by 120 days or more.
- REO – the property was already foreclosed for non-payment and is now Real Estate Owned (REO). The property, not the note, is being sold.
The setup process involves three phases:
Phase 1 – Complete the sign-up form on the home page of this website.
Phase 2 - You will be sent a registration code to login to the portal. During your initial login you will need to:
- Complete the account registration details (contact information, profile settings, purchasing entities, and preferences)
- Complete the Non-Disclosure Agreement
Phase 3 – The account is reviewed for approval. You are notified via email with a link for full access. You can now start searching, reviewing, and purchasing notes.
Due to the in-depth and sensitive nature of the search data, including complete due diligence files, this is a manual review process, which can take up to 2 business days. If you have not heard back during that time, please double-check your spam folder and then contact us at [email protected]
It is important that an investor has prior experience in working with non-performing or REO assets before taking on this higher level of risk. If users are uncertain in this, they can default to viewing just the performing assets during signup.
- Note Information (dates, repayment terms, etc.)
- Property Information (address, type, description)
- Servicing Information
- Payment History
- Document Copies (Note, Mtg/DT/Contract, Assignments, Closing Statement, Endorsements/Allonges, Modifications, etc.)
- Title Report or Prior Title Policy (if any)
- Prior Broker’s Price Opinion (BPO)