Should You Sell Your Defaulted Notes? Process, Pricing & Insights - #310

As a private lender, the big question eventually comes up: does it ever make sense to sell a defaulted note? The answer… it depends. In this episode of the Private Lenders Podcast, Chris and Jason break down the real strategy behind selling non-performing notes (NPNs), who buys them, when it's worth considering—and when it's better to ride it out yourself.

If you're a private lender navigating late payments, defaults, foreclosure timelines, capital deployment, or debt fund pressure, this conversation will save you time, money, and headaches.

🔍 What We Cover in This Episode:

• When selling a defaulted note actually makes financial sense

• Pricing, payoff scenarios & real-life examples

• Interested vs. third-party note buyers

• How second lienholders + business partners become natural buyers

• Structuring profitable exits without giving away equity

• Why month 2–4 of default can be the sweet spot for selling

• What note buyers look for—and what makes them walk

• Why early defaults may cure, and late defaults become too expensive

• How debt funds think about capital vs. time in non-performing assets

• Due diligence and legal considerations when transferring a note

💡 Key Takeaway:

Not every defaulted loan belongs on your balance sheet forever. If the numbers work, the buyer is motivated, and you're ready to redeploy capital—selling a non-performing note can be a win-win… but only in the right circumstances.

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Are you a new or experienced private lender or hard money lender? Join Jason Balin and Chris Haddon from Hard Money Bankers as they draw from their extensive experience running a successful hard money lending company since 2007. Tune in weekly with episodes related to all aspects of private lending. From discovering lucrative loan opportunities to securing private capital, effectively managing your loan portfolio, handling defaults, and much more, we've got you covered.

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