Do you have a real estate note for sale… or other promissory note for sale?
Well here are some key factors that you need to keep in mind when selling a mortgage note.
When an investor looks at buying a mortgage note, he looks at the note buying opportunity as a risk-reward situation. The more risk the real estate note investor is asked to take, the less money the real estate note investor willing to pay.
So what are the risk factors for an investor when you decide to offer your mortgage note for sale?
The first question is: how likely is it that the investor will get paid on time? Here we look at two factors. What is the credit of the borrower and how is the payer performing on his note obligation to you? The better the credit and performance on your note, the less likely the borrower will default and the the more money we will pay for your note.
The second group of factors are all related to the collateral. Keeping in mind that we are looking at risk – reward, the most desirable mortgage note is on a single family home in which the borrower lives. The least desirable real estate note is a mortgage note on raw land. Because if the borrower has a financial hardship, the house payment is probably the last payment he will let goas he needs a place to live. While not making his payments on an investor promissory note or a real estate note on land may affect his credit history but it will not greatly affect his life style… but losing his home will greatly affect his life style.
The next group of factors all relate to payment terms. Let’s assume we were looking at two different real estate notes which are essentially the same with the exception of the interest rate. Let’s assume they are $100,000 private real estate notes. One note is written at 4% with a monthly payment of $477 and one is written at 8% with a monthly payment of $733. Obviously we will pay more for mortgage note with the $733 payment.
When placing your note for sale, be sure to evaluate all options. For a fair offer, fill out the brief form on this website. Or call us at 772-232-2383.
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