Mortgage Note Solutions for Investment Advisors
Helping Clients Manage Seller Financing Mortgage Notes with Confidence
As an investment advisor, you may work with clients who hold seller financing mortgage notes. These instruments—also called real estate notes—represent enforceable receivables that can generate long-term income, create liquidity options, and diversify a client’s overall investment strategy.
At Secured Capital Resources, we offer mortgage note solutions for investment advisors, enabling you to guide clients through the evaluation, structuring, and exit strategies for these unique financial assets.
What Is a Seller-Carry / Seller-Finance Note?
The terms Seller-Carry and Seller-Finance are used interchangeably.
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The buyer and seller agree on a purchase price for a property, typically a single-family home or other type of real estate.
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Instead of using a mortgage loan from a bank or other financial institution, the buyer signs a legal document — a promissory note — promising repayment.
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The amount, interest rate, repayment schedule, monthly payment, and maturity date are detailed in the note.
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A deed of trust or mortgage secures the obligation, granting the seller rights similar to those of a mortgage lender.
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The seller receives principal and interest payments, often at higher yields than traditional fixed-income options.
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This type of financing allows clients who cannot qualify for traditional loans to purchase real estate, while creating a steady income stream for the seller.
Why Seller Financing Matters to You and Your Client
Seller-financed notes are flexible financial tools that can play a meaningful role in a client’s portfolio:
✔ Cash Flow – Regular monthly payments of principal and interest generate predictable income.
✔ Portfolio Diversification – Clients can include real estate investments and mortgage note investing as alternatives to equities or bonds.
✔ Liquidity Options – Notes may be sold in whole or in part to investors, creating lump-sum access to cash.
✔ Risk Considerations – Due diligence on the buyer, property, and repayment terms is essential to manage default risk.
✔ Market Alignment – Notes tied to single-family homes or other properties often move with the broader real estate market.
Tax Implications of Selling Notes
When a seller sells the note (instead of continuing to collect payments), the IRS treats it like selling an asset — often triggering capital gains tax.
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The gain is the difference between what the seller originally paid for the property (adjusted basis) and the total they’ve collected or are owed, including the note sale.
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If the note is sold for less than its full value, the seller may recognize a discounted capital gain or loss.
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If sold for more than its current value on paper, they may owe tax on the unrealized portion of the gain up front (even if they hadn’t yet received all the payments).
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Part of the gain may be taxed as ordinary income if the note was created in the course of business (like for a builder or dealer).
Due to the complexities, most clients work with a CPA and an investment advisor before selling or restructuring notes.
We work directly with advisors to provide mortgage note solutions that strengthen your client relationships:
Note Evaluation
Review repayment terms, interest rates, property value, and buyer credit
Liquidity Options
Connect clients with vetted buyers of performing notes for immediate cash
Strategic Planning
Assist clients in aligning mortgage note investing with their long-term investment strategies
Professional Support
Collaborate with real estate attorneys and other professionals to ensure compliance and smooth transactions