Nearly 90,000 New Seller-Financed Notes Are Being Created Each Year
Private mortgage notes represent one of the most overlooked segments of the American real estate finance industry. While conventional mortgage lending receives most of the attention, tens of thousands of property sellers become private lenders every year when they agree to finance the sale of their own real estate. The resulting promissory notes represent billions of dollars in financial assets—and an enormous prospecting market for mortgage note brokers and investors.
According to NoteInvestor.com’s analysis of publicly recorded seller-financed transactions, approximately 87,212 seller-financed notes were created during 2025 with a combined face value of approximately $29.5 billion. Even more impressive, approximately $137.8 billion in new seller-financed notes were created during the five-year period from 2021 through 2025. (noteinvestor.com) Those numbers demonstrate that private mortgage notes aren’t an obscure financing niche. They represent a substantial alternative-finance marketplace.
Nearly 90,000 New Notes Every Year
One of the most encouraging statistics for note brokers is the consistency with which new notes are being created.
Seller-financed transaction counts have remained remarkably steady:
2020 — 84,007
2021 — 89,678
2022 — 83,647
2023 — 89,773
2024 — 89,890
2025 — 87,212
Despite dramatic changes in interest rates, home prices and conventional mortgage activity, the market has continued generating roughly 85,000 to 90,000 new seller-financed transactions annually. Dollar volume has increased even more dramatically. Seller-financed note volume totaled approximately $22.5 billion in 2022, increased to approximately $28 billion in 2023, reached $30.3 billion in 2024 and remained at approximately $29.5 billion during 2025. (noteinvestor.com)
For note brokers, this means the prospect database is continually replenishing itself. Every year another generation of property sellers becomes private mortgage noteholders.
Today’s Notes Are Substantial Assets
The average size of these notes may surprise newcomers to the industry. During 2025, the average residential seller-financed note was approximately $272,856, with an average loan-to-value ratio of approximately 76%. Commercial seller-financed notes averaged approximately $661,996, while land notes averaged approximately $286,178. (noteinvestor.com)
Residential transactions remain the largest category, accounting for approximately 62% of seller-financed transactions. But commercial property represents a significant opportunity that brokers shouldn’t overlook. Approximately 14,506 commercial seller-financed transactions were created during 2025, representing roughly $9.6 billion in note volume. Land represented another approximately 15,166 transactions and $4.34 billion.
That creates opportunities far beyond single-family houses. Private notes can be associated with apartment buildings, warehouses, offices, retail properties, mobile-home parks, farms, vacant land and even business acquisitions involving real estate.
Who Owns All These Notes?
Here is perhaps the most important statistic for someone considering the note-broker business:
Approximately 86% of sellers creating private mortgage notes during 2025 created only one note.
Only about 14% created two or more. (noteinvestor.com) In other words, the typical private mortgage noteholder isn’t a bank or professional finance company. It is an individual. Perhaps someone sold a rental property and agreed to take $50,000 down while financing the remaining $250,000.
The seller may have initially liked receiving monthly payments and interest. But circumstances change. A year later that seller might want cash to purchase another property. Another may be retiring. Someone else may need money for a business investment, medical expense, estate settlement or family obligation. Others simply become tired of collecting payments and worrying about whether the buyer will continue paying.
That’s when the note becomes a prospect for the secondary market—and when the note broker enters the picture.
Where Are the Notes?
Private mortgage-note activity is concentrated heavily in several states. Approximately 66% of seller-financed transactions during 2025 occurred in just 10 states.
Among the leading states were:
Texas
Florida
California
North Carolina
Georgia
Texas and Florida have consistently ranked among the largest seller-financing markets. That concentration creates an important advantage for new brokers. You don’t necessarily need to market throughout the entire United States. A broker can develop highly targeted campaigns in a few states, metropolitan areas or even individual counties with substantial seller-financing activity.
Public records can often identify privately held mortgages and deeds of trust. Commercial list providers also compile this information into prospect databases. That makes the private mortgage note business particularly well suited to direct mail, email where permitted, telephone prospecting and highly targeted digital campaigns.
What Could the Next Five Years Look Like?
There is no authoritative institutional forecast specifically predicting the size of America’s privately held seller-financed mortgage-note market five years from now. We should therefore be careful about claims that the industry will grow at some precise annual percentage. But we don’t need a complicated forecast to understand the potential.
Suppose seller financing simply continues at approximately its current rate of 87,000 to 90,000 newly created notes per year. Over five years, that would potentially produce approximately:
435,000 to 450,000 additional private mortgage notes.
Now consider dollar volume. If annual seller-financed volume merely remains around today’s approximately $29-$30 billion, five more years could potentially generate:
$145-$150 billion in additional privately created mortgage paper.
Those figures are not forecasts. They are simple extrapolations based upon current annual activity. More importantly, they assume no significant growth at all. If economic conditions encourage greater use of seller financing, the numbers could be higher.
An Industry That Continually Creates Its Own Prospects
This is one of the most attractive characteristics of the mortgage-note business. The prospect pool isn’t fixed. Every year tens of thousands of new sellers agree to finance real estate and become private noteholders.
Some will hold their notes until maturity. Others will eventually decide they would prefer cash. The note broker’s job is to find them.
With nearly $30 billion in new seller-financed notes currently being created annually, brokers don’t need to capture a large percentage of the market to build a successful business. They simply need to develop an effective method of identifying noteholders and being there when one of them asks the most important question in the note industry:
“What is my mortgage note worth if I sell it for cash today?”