Eric Scharaga
Founder, Damen Capital
Private lender and direct land note buyer serving land investors in 40 states. Featured on REtipster, Legends of Land, and Land Investing Online. LinkedIn →
You sold land with seller financing and now hold a promissory note. Your first thought is the bank down the street. Here is why that usually goes nowhere, who actually buys private notes, and what you can expect to get.
Prefer to read? The short answers are below, and the full transcript is at the bottom.
Almost never. Banks make and buy loans that fit their own lending rules, and a private seller financed note does not fit them.
A bank underwrites the loans it makes itself. Your note was written by you, for your buyer, on your terms. It is a one off loan with no bank underwriting behind it, often on vacant land, which most banks don't lend on to begin with. So the answer is usually a polite no.
Private note buyers do. They specialize in seller financed notes and price each one on its own terms.
Note buyers are private companies and investors that buy seller financed notes for cash. Some specialize in houses, some in land. A land note buyer knows how to value vacant land, reads your note and deed of trust, checks the payment history, and makes an offer on that specific note.
A well structured land note usually sells for 80 to 90% of the remaining balance.
The price depends on the down payment your buyer made, their credit, the interest rate, how long the note runs, the payment history, and the property. Bigger down payments and on time payments push you toward the top of the range. If the full note doesn't fit, a partial sale of some of the payments is another option.
Send the terms for a written offer, accept it, send the documents, and close through a title company in as little as 7 days.
Start with the basic terms: balance, rate, payment, down payment, and the property. You get a written offer within 24 hours. If you accept, the buyer reviews the documents and orders title, and the sale can close in as little as 7 days. There are no fees to you; the offer you accept is what gets wired.
Run your numbers through the note value calculator to see what your note is worth before you call anyone.
The free calculator on our site asks for your note terms and shows an estimated offer, including a partial offer if the full note doesn't fit. It takes about two minutes.
0:00 Calling the bank about your note. If you're holding a promissory note from a land sale, at some point you'll want the cash now instead of a check every month for the next eight years. And the first place most people think to call is their bank. I'm Eric Scharaga with Damen Capital. I've been buying land notes since 2016, and I get this question all the time. So let's walk through what happens when you call the bank, who actually buys these notes, and how to get the most for yours.
0:24 Will a bank buy my promissory note?. Here's the honest answer. Almost never. A bank makes money on loans it writes itself, under its own rules, with its own paperwork. Your note was written by you, for your buyer, on your terms. Maybe your buyer had a 620 credit score. Maybe the land is ten acres with no house on it. Most banks won't even make a loan on raw land, so they're not going to buy one somebody else made. When you call, you'll usually get a polite no, or you'll get passed around until you give up.
0:54 Who buys private promissory notes?. The people who buy these notes are private note buyers. That's what we do. Some buyers focus on houses, some on commercial property. We focus on land. A land note buyer knows how to value vacant land, how to read your note and your deed of trust or mortgage, and how to look at your buyer's payment history. We price each note on its own. No checklist that kicks you out because the property doesn't have a house on it.
1:20 How much will a note buyer pay for my note?. For a land note that was set up right, you'll usually see 80 to 90% of the remaining balance. Where you land in that range comes down to a few things. How much your buyer put down. Their credit. The interest rate and how many years are left. Whether they've paid on time. And the property itself. A buyer who put 30% down and has never missed a payment gets you a much better number than a buyer who put 5% down. If the full note doesn't fit, we can often buy just part of the payments, which we call a partial. You get cash now, and the payments come back to you later.
1:56 How do I sell my note?. Here's how it works with us. Send the terms. The balance, the rate, the monthly payment, what your buyer put down, and where the property is. You'll get a written offer within 24 hours. If you like it, you send the documents, we order title, and we close in as little as 7 days. We don't charge you a broker fee or closing costs. The number you accept is the number that gets wired to you. One tip: never send your original note to anyone before you have a written offer from the company that's actually wiring the money.
2:29 What should I do next?. So skip the bank. If you want to see what your note is worth right now, use the note value calculator on damencapital.com. Put in your terms and it'll show you an estimated offer in about two minutes. And if you want a firm written offer, send us the note. Get a free quote at damencapital.com. Thanks for watching.
Almost never. Banks buy loans that fit their own lending rules, and a private seller financed note on land rarely does. Private note buyers buy these notes.
A well structured land note usually sells for 80 to 90% of the remaining balance, depending on the down payment, the buyer's credit, the rate, the term, and the payment history.
You get a written offer within 24 hours, and the sale can close in as little as 7 days after you accept.
Not with us. We charge sellers no broker fee, no closing costs, and no due diligence fee. The offer you accept is the amount wired to you.
Tell us the property, the buyer, and the terms. Written quote in 24 hours, cash at closing, no seasoning.
Private lender and direct land note buyer serving land investors in 40 states. Featured on REtipster, Legends of Land, and Land Investing Online. LinkedIn →
Already have an offer on your land note? Send it over and we'll give you ours within 24 hours. How it works →