A note in this context can be a promissory note, a mortgage or contract for a property that can be converted to cash, depending on the conditions written on the note. For promissory note, it is a contract that the issuer promises to pay a certain amount of money for a period of time to the payee. It is like making a loan and giving collateral as a guarantee that the issuer of the promissory note will pay the amount agreed by the parties.
A note buyer takes a note and converts it to cash. Most note buyers are interested in mortgages for properties. If you are currently paying a mortgage, you can sell your mortgage contract to the note buyer, and the latter gives you the remaining cash value of the contract. Your property becomes collateral in the meantime. It is also possible to sell only a partial amount of your note, if you only need that much cash.
Notes are usually sold at a lower value than the property's real value, and the monthly payment for the note has a higher accumulated value. It works just like a loan, where interest is paid to the borrower.
Another transaction that note buyers do is buy mortgage contracts from real estate owners who have sold their property to a buyer, where the latter pays a monthly amortization for a span of 10 years or more. The property owner may find himself at a disadvantage in collecting monthly, sometimes delayed, payments. The property owner can sell the note to note buyers, so the latter can carry on the job of collecting from the property buyer. In this case, note buyers buy low and collect the same monthly amortization. So if the face value of the note is $10,000, the note buyer may just buy it at $7,000, but the total mortgage to be collected will still be $10,000. The advantage for the property owner is that he gets cash, while the note buyer will have to collect monthly payments for a few more years.
To find reliable note buyers, it is best to "shop around" first. There are listings of note buyers online, and you can ask them for quotes first at no cost, so you can compare offers from different note buyers. They will evaluate your mortgage note, and depending on your property, its location and current face value.
If you want to be a note buyer yourself, you should invest in your education. It is like learning how to broker stocks or real estate. It is best to get tips and pointers from note buyers that do not operate in your area so they will not mind helping you, since you will not become their competition. Skills on investment strategies should be learned and you can start small to avoid too much risk. Also choose good properties to make sure you will not lose money in the end.