Okay, let's take a look at the typical payout options:
Full Purchase - The investor buys the entire note. This alleviates the seller of the responsibility to collect payments in the future.
Straight Partial - The investor purchases a predetermined number of payments in order to meet the seller's cash requirements. After the last payment of that predetermined term ends, the balance on the note reverts back to the seller.
Reverse Partial - The seller receives a lump sum and continues to receive the full payment amount for a specified period of time. This solution is appropriate when the seller needs a large amount of cash at closing but also wants to receive the monthly payments for a while.
Split Payment - The investor purchases half of the seller's monthly payment; the seller continues to receive the income from the other half.
Balloon Only - The investor purchases only the balloon due at the predetermined date on the promissory note. This alternative works in situations where the seller needs some cash at closing but doesn't want to wait 30 years to collect the balance.
So, as you can see, you do not have to sell your whole note. There are benefits for each option. It just depends on what works best for your situation.
Frederick Webb is a Certified Cash Flow Consultant and is President & Co-Founder of Webb Funding Group, a small debt brokerage firm he runs with his wife, Kashita Webb.
You can find them at: http://www.mortgagenotecash.com
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