How to Become a Noteholder Broker
A noteholder is a person that purchases a real estate contract, such as a mortgage, as a financial investment. A dual role as both noteholder and broker means that you are responsible for purchasing notes to hold as well as selling those notes to other potential investors. Becoming a broker for this process requires knowledge of the real estate market and an understanding of how this form of financing works. Establishing yourself as a noteholder broker may also require a financial investment should you decide to do so independently.
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Instructions
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Establish yourself as a business. File the paperwork to become a limited liability corporation and create business cards as well as a website. Potential investors are likely to be more comfortable doing business with you if you have a credible existing business structure.
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Develop a business plan if you decide to go into business for yourself. This plan should include ways in which you will acquire notes as the noteholder and methods by which you will broker them. It should also include any background you have in real estate, how you plan to expand your business in the local real estate climate and goals related to being a noteholder for five and 10 years out.
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Retain the services of a real estate lawyer. He can walk you through the process of purchasing and holding notes in your state and others should you choose to branch out. Moreover, he can advise you on any contracts you may cultivate as a broker and assist in transactions in which you sell a note to other individuals.
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Seek out potential investors. These are individuals who may be interested in purchasing a note from you once you obtain it. The Note Buyer's Guide recommends that you solicit about 50 potential investors to purchase notes from you, so that you've got a large group waiting to do business with you. However, this depends on the size of your operation; if you only to plan to broker a few deals here and there to get started, you might consider lining up a few investors at a time.
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Work with a list broker to obtain notes for the noteholding side of your business. The purpose of working with a list broker is to easily obtain the names and contact information for those interested in selling their notes. You can also seek out people on your own who may be interested in selling or purchasing their notes and provide them with collateral to use your services.
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