I have a potential here and I will find out by this Saturday when we meet face to face just how potential this is. Here is the scenario.
The house is purchased for $230K and then sold for $300K with $150K down and take back a note for the remaining $150K. Not a problem. Oh and yes, I could not believe it either when they told me they had $150 to put down.
I take my $70K right off the top and apply the remainder to the mortgage I have which then leaves me with a break even note.
What are my options in order to sell the note? I would prefer to get rid of it and move on to the next deal, however from what I can tell of the note business it is the “discounted” note business.
Despite the apparent nice loan to value, you may have a hard time selling your note until it seasons.
Thanks Paul. I don’t have to much of a problem with that. Anyone else out there have a suggestion? I am leary of keeping the property to long, since I know where I live there are laws on how much a person can lend before they are required to become a licensed mortgage broker. And if I recall that number was quoted to me at something like $2 million in residential homes. For me, that is to much like work to go through all that hassle and to much commitment
You could actually try to sell it now, if the buyer is solid - good credit and income, etc. But you would take a huge hit on the discount - maybe 50%. However, if you let it season for 6-12 months so the buyer can develop a history of solid pay, that ratio should go up fast.
I have some discount note buyers I’ve worked with in the past. I’ll PM you with a request for more info.
Thanks, Salverston. I look forward to hearing from you.