Please help. Questions about funding, buying a note, etc.

Financing, Hard Money Lenders, Private Money
1

Ok, I’ve read books, articles, websites, forums… haven’t put it all to use yet, but now I am trying. I’ve been sending out 10-15 emails per day every single day trying to find people willing to sell their home with a lease option. And along the way, I found a guy trying to sell a note.

He owner financed a home for a little over $16000, got $6000 down payment from the guy, and did the financing for $375 for 30 months. The buyer has paid 3 months so far, and now the seller is trying to get $5000 for his note on the home. There is $10125 left on the note if my math is right.

So please correct me if I’m wrong. If I buy this note for $5000, and get payments of $375 for the next 27 months (2.25 yr) I will have turned $5000 in to $10125.

What will be the percentage APR I earn on my $5000?

And what kind of loan can I get for this if I want to leverage? I have $4000 cash, but I like to keep a cushion. So if I need to come up with $2000 for this deal, how can I?

Thanks in advance for all replies and advice!

(Edit: Somehow, I came up with 67.97 APR… is this real?!)

2

APR on the note is 9.3% http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx (I plugged in interest rates, till I got a monthly payment of $375)

Return on Investment is 47% http://www.money-zine.com/calculators/investment-calculators/return-on-investment-calculator/

I have no idea how the secondary note markets work, but assuming this is a first position note secured by deed, it looks like a great short term investment (assuming property values are over 5k).

3

I’ve got an 8% note I’ll sell ya.

original face $13,400 2nd position note backed by a filed deed of trust on real property (mortgage).
8% 30 year amort beginning 9/1/06
$98 monthly
current balance is $13,167

you do have to hound them for payment. they always pay, but it’s like pulling teeth.

make me an offer.

I also have another 8% note unsecured with these guys same terms balance $2,285. ($30/mo)