Note Sales: Buying and Selling Notes

If a seller was going to have a note buyer buy their note, these are the questions that a notebuyer would ask before deciding, there may be more questions, but this will be most of them.  For those of you newer to notes, imagine selling a house worth $200,000 on a contract for deed for $200,000 and then a buyer is paying 8% interest with 10 down payment.  Then the seller who is still the owner on the contract for deed decides they no longer want to own the house, they can sell that contract for deed as an “income stream” to a new buyer who will pay cash and cash you out.  They would discount this amount, so they would pay you probably 85-90% of the remaining loan.  So let’s say $200,000 - $20,000(10% down payment) that’s a $180,000 balance, the note buyer would pay 90% of that, which is $162,000 cash , to cash you out.  Please keep in mind the higher the down payment, higher the buyer’s credit score, shorter the balloon, and higher the interest rate, the lower the “hit” discount the seller will take.

Preliminary Data Sheet

Note For Sale

 

Payor Data

• Name:
• Address:
• Credit History:

 

Note Information

• Date of the note was created:
• Original Principal Amount:
• Current Balance:
• Interest Rate:
• Amortization Period:
• Balloon?
• Due date of balloon:
• Amount of balloon:
• Payment History:
• Payment (interest only):
• Escrow (Taxes & Insurance):
• Total Payment:
• 1^st Payment Due Date:
• Last Payment Made:
• Next Payment Made:
• # of Payments Made:
• # of Payments Remaining:

 

Collateral Data

• Security Position (1^st, 2^nd,…):
• Type of Security:
• Type of Property:
• Is it owner occupied:
• Property Address:
• When did the property last sell?
• Sales Price:
• Cash Down Payment:
• Current Value of Property:
• Any additional liens on the property:
• Current balance of liens:
• Other relevant information:

If you have 10% to put down on a contract for deed, or want to cash out and sell the note on your contract for deed please email me at ron@Minnesotainvestors.com

I suppose note buying could even buy structured settlement I could do a future post on that.

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This entry was posted on Monday, May 26th, 2008 at 8:25 pm and is filed under notes, notes for sale. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.