Lets say I sell my property by owner for 100k, whats the max offer i would get if I decided to sell the note? Assuming the buyer put 5% down with 10% interest.
I dont own said property, i am just trying to get a few exit strategies if plan A and B don’t work. Or if I need some cash for another deal.
I am not a pro on this so take what I say with a grain of salt:
A lot would depend on the seasoning of the note and the strength of the buyer’s credit. I imagine the LTV of the deal would also play a role in determining the risk and subsequently the offer.
Ok I will try to get more specific. A rehab I sell for 100k property appraises for 115k the buyer has sub-par credit and cannot refinance.
What do you mean by “the seasoning of the note”?
The number of payments made against the note. If it’s a fresh note with wet ink on it still and no payments or a few payments on it you’re not going to get much for it. If you have had it a year and the payments have been on time every month its worth far more. I won’t guess what the discount off face value in each case is as I don’t know exactly but I can tell you the one that has seasoning will fetch a much higher price. Can you afford to hold the note a little while and let it season or do you need your money out asap?
:cool RICHis right as in the buyers credit and the like play a big deal now !! NOT alot of buyers of notes are giving a lot now due to the market SO yes if you can sit on the note for say 6 months your pay off when you were to sell the note would be more as it is a proven note !! THERE are some doing simos but not many and there are a few buying new notes but not many right now
I am told this will be picking up after the first of the year if the market gets stable ???
Buckwheat,
I would be surprised if you could get more than $70K (if that) for this note. If I were buying it, I would probably not want to pay more than $60K.
Mike