What is a Note

Today I would like to talk to you about a document called a "note." From day one, notes have always been synonymous with the real estate business. Well, let’s start with, what is a note and what purpose does it serve in the real estate business? A note is an IOU, a written promise to pay, with all the terms and conditions of the obligation, signed and in proper legal format. It’s also referred to as "Promissory Note."
A note can be secured or unsecured. A secured note is one that is attached to another document called a "Mortgage" which is a document that simply states that if the obligations of the note are not met, the property may be sold to pay for the note, thus the note is secured by real estate. With an unsecured note, there is no collateral for non payment of the terms. The note is only secured by the payer’s written promise to pay.
Notes are bought and sold everyday by buyers who are looking for long term investments, along with the sellers of the note looking to meet a special financial need that must be met for a variety of different reasons, such, as credit card debt, downsizing their assets, maybe their putting a kid through college, or maybe they didn't even want the note in the first place and sold it as an only means of liquidating the property in a fast and timely manner.
To really appreciate the note and its roots in american cullture, lets cover a little history on the note and its beginnings in american culture and american business. From 1781-1784 Robert Morris was,” Superintendent of Finance for the United States of America". He also was a participated in the signing of the Declaration of Independence and was our nation’s top financier of the time. He supported the American Revolution by seller financing 1,400,000.00 in notes to pay the soldiers because our government at the time didn’t have the funds to pay them. Morris created notes to buy military supplies. He also took out loans from friends. He then created his own notes on his own signature, on his own promise to pay. Any hopes Robert Morris may have had for a return investment were lost when 1500 of his seller financed ships were sunk during the war. Because of this, he was only able to break even on his entire investment.

The American Revolutionary War was the catalyst for the birth of our nation. It could have never been achieved without the efforts of Robert Morris and the seller financed notes he created that made it possible to win the war for the country he loved, the country you and I love, the country we call America.

I hope this info was helpful in your understanding of what a note is, its purpose, and its function in modern everyday real estate transactions.If you should need help in selling your note or have any questions, don't hesitate to call Kenneth Kern at (512) 417-2933