You can sell two notes or twenty in one transaction. Each note is still priced on its own facts, and a package price can come in below the sum of separate sales, so ask for the group priced both ways before you decide.
How buyers price a group
A group of notes sold together is called a pool or a note portfolio. People arrive at one by different routes: a landowner splits a tract into lots and finances each, an investor sells rental houses to tenants on owner financing, a family inherits a parent’s notes, a small fund closes out its holdings.
A buyer prices a pool from a spreadsheet known as a tape, with one row per note: balance, rate, payment, payments left, property type, location and payment record. Each row gets its own price. The offer then comes back either as a single figure for everything or as a price per note. Ask for the price per note, because a single figure hides how each note was treated and gives you nothing to check the math against. When you send a tape, or a plain list if that is what you have, through our pricing form, ask for both.
Selling together or one at a time
| Sold as a pool | Sold individually | |
|---|---|---|
| Number of closings | One | One per note, or per small group |
| Weak notes | Carried along with the strong ones | May draw low bids or none |
| Strong notes | May be priced down to cover the weak ones | Each goes to the buyer who values it most |
| Your effort | Lower | Higher |
| Buyers who can bid | Those with enough capital for the whole pool | A wider group, including smaller buyers |
A tidy pool of similar notes, all paying on time, can attract a buyer who values getting them in one purchase. A mixed pool is different. If it holds several types of note, say first-lien house notes, a few land contracts and one note where the payer has stopped paying, no single buyer is likely to be the best bidder for all of them, and splitting it into matching groups lets each group go to a buyer suited to it.
Location works the same way. Each note is transferred under the rules of the state where its property sits, so a pool spread across states takes more coordination at closing, and a buyer who does not purchase in one of those states will pass on that note or mark it down.
Selling fewer than all of them
Holding several notes gives you choices a single note does not. If you need a set amount, you can sell the notes that raise it and keep the rest. You can keep the notes that pay on time and sell the ones that take up your attention. Or you can sell partials: a partial is the sale of a set number of payments from a note, after which the note returns to you. Spread across several notes, partials raise cash while the long-term income stays yours, provided each note is one a buyer is willing to divide.
What to prepare
Build the tape yourself: one row per note, with the facts listed above and the property address. Then, for each note, collect:
- The note and the recorded security document.
- A payment record, from a servicer or your bank statements.
- Proof that property taxes and insurance are current, where you have it.
Complete files matter more on a pool than on a single note, because a buyer working through many files will set aside the incomplete ones or mark them down. Check each file against the documents you need to sell a note before the tape goes out.
Ask for the pool priced both ways
With a price per note and a price for the whole group in hand, add up the per-note prices and set the total beside the package figure to see which route leaves you with more. If the two are close, one closing may be worth the small difference to you. If they are far apart, look at which notes the package marked down and consider selling those separately or keeping them.
Related questions
Do I get a better price for selling notes in bulk?
Not necessarily. A buyer may value getting similar, well-documented notes in one purchase, or may mark the whole pool down because of its weakest notes. A price per note next to a price for the pool shows you which applies.
Can I include a note that is not being paid?
Yes, but it will be priced very differently from the ones that are paying, and by a different kind of buyer. Selling it separately keeps it from pulling down the offer on the rest.
How many notes make a portfolio?
There is no set number. Two notes can be sold together. What matters to a buyer is the total size and how alike the notes are, since that decides who can bid on them.