Commercial General Notes
General notes for commercial construction are simply financial documents that record a legal relationship between a person (the note holder) and a person (the note receiver). General notes are used primarily for the funding of specific projects. For example, an investor can purchase 100 thousand notes for a piece of property with one note. This is done so that the investor can receive payments based upon the value of the property over time. This transaction is also known as a mortgage loan.
When a note is purchased, there will generally be two note holders involved: the property owner and the developer. The note holder will sell the note to the developer in exchange for funds for the project. Note holders to receive payments from the developers based upon the revenue earned on the property. Note holders usually have recourse against the property owners should the property owner fail to meet the terms of the agreement.
The most common types of commercial notes are senior notes and sub-debts. Senior notes are notes that have been secured by a senior note holder such as a lien or mortgage. Sub-debts are notes that have been secured by loans or other forms of financing similar to a mortgage. These notes are often times unsecured and notes for commercial properties are typically senior unsecured notes.
When it comes to these types of notes there are many benefits. For example, note holders often have first position rights to the land they have secured. This means if the business or location does not earn an income sufficient to pay off the debt, the note holder has the right to foreclose. They may do this through a court process, by physically removing the property from the market, or by negotiating a settlement. Once a note is sold, the property is usually gone from the market. Therefore, the note holders gain immediate title to the land they purchased.
General notes also provide a number of strategies to financial markets. When private investors own notes, they can leverage themselves by making a large purchase of a property and holding a note. A private investor can also borrow large sums of money against a note by using it as collateral. This strategy provides them with an opportunity to increase their net worth by borrowing against their own notes.
There are a number of ways to sell commercial property notes. One way is through a note buyer. A note buyer is a company specializing in purchasing notes from businesses and individuals. Many note holders choose to sell their notes to these specialized note buyers instead of holding a traditional open house or auction. Note buyers will usually offer a greater discount than if you held a traditional open house and can offer the best terms.
Another way to purchase a note is through a business intermediary. An intermediary, like a broker or attorney, represents both the buyer and the seller. They are able to negotiate the best deal on the note depending on the specific needs of the buyer and the seller. This type of arrangement is preferable for buyers who have little to no experience in dealing with business finances and companies that specialize in purchasing these types of notes.
If you have property that you do not currently use, you may wish to consider selling it. This could be your own home, land, investment property, or other property. However, if you have a specific need for this property, you may want to consider working with a note buyer. These types of brokers specialize in purchasing all types of commercial notes for both businesses and individuals. As a note buyer, they would be able to guide you through the entire process of purchasing your note. However, if you do not have any type of need for this property, you may want to consider other options.