Possible Note For Sale?

Question

Guys, I am not experienced in note selling, so I am going to throw this out there, and ask for ideas and suggestions. I have a 1,800,000.00  note on a 144 space mobile home park that I sold about 5 years ago. Financed for 25 years at 8%. Pmts are 13,983 per month. The park is full, with a waiting list. The thing is a tremendous cash cow. No problems at all. The guy has never been late. I have known him many years, he worked for me and ran the park before I sold it to him. I just sold it on a simple "contract for deed". I put a 5 year call in the contract, so I could re-negotiate the terms or call it due. The guys credit is excellent and so is his wife's, and she would be willing to sign also, but I doubt he could do anything now as tight as the banks are.
   I am looking for a way for him to cash me out. 
Where are the best places to sell a note, or maybe a better question is how is the best way to sell a note?
   I don't have to sell it, and I am happy the get the 8% on my money, but here is the "fly in the ointment". My basis in the park was very low, so I am paying 15% capital gains now. As you know, that will go back to at least 28% next year, and I suspect probably higher. I hate the thoughts of giving the government that kind of money, I would just like to cash out now, pay my 15% and move on. Any ideas,,,,,Like I say, the 5 year date is up so we could re do the note pretty much any way to suite any one. The guy has no problem re- financing and cashing some one out, I just think it would be hard to do right now.

Greg Gehlen · Answer

Doug,
Definitely understand your aversion to higher capital gains and looking for alternatives before the higher rates kick in.  Unfortunately there is not a huge market for larger seller financed notes such as the one that you now hold and because of that you would be looking at a hefty discount if you were to sell it on the secondary market.  You may want to look at selling some of the payments (vs. the entire note) as this would allow you take advantage of the lower tax rate and minimize your overall discount.  Anyway, hope this helps.
Greg

Loc R. · Answer

There are some creative options in this situation.

I am not an accountant, so please double check these ideas with your accountant.

One option is to sell your payments in stages.  Example:  Let's say you have 150 payments left, you could sell the next 50 payments for X dollars, and once those perform, sell the next 50 for X dollars, and finally sell the final 50 payments for X dollars.

Another thing you could do is break up the note into 2 notes:  a 50% LTV 1st and a (remaining equity)% LTV 2nd.  Sell the 1st, and keep the 2nd for yourself.

By having such a low LTV on the 1st, an investor will feel protected with an even lower ITV and you won't have to take such a hard discount.

And, of course, you can and should call Marc Faulkner.  I have worked extensively with him and he is a good guy to work with when it comes to the note business.

Good luck.  Please keep us updated.

Ana Irvine · Answer

Hi Doug,
          
          Hereâ€™s a little bit of advice from my end, though you may be still aware of it â€“ contact only a Certified Mortgage Appraiser for the correct appraisal of the note!
          
          I agree with Greg.
          
          Cheers,
          Ana

Marc Faulkner · Answer

Doug,
     Sorry I have been super busy and not haunting these boards as much as usual.  I will send you a friend request so that you have my contact information.  I am sure I can help you with your situation and look forward to working with you.

Doug Cobb · Answer

Thanks for the suggestions. I will try to get in touch with Marc.

R Jenkins joshua · Answer

That is okay , but do not forget I could also give a competitive quote also

R Jenkins joshua · Answer

While your doing research give me a call at [PHONE NUMBER REMOVED]
          
          Myself and group of potential investors would love to talk with you about your note  
          
          I am a Note Buyer and Note Seller (fyi)
          
          I will have several short direct questions for you such has position of Note , Payor Credit Score
          
          We could close within 24 days after accept offer 
          
          Ask for Ramon

Doug Cobb · Answer

Thanks Greg,
   I'm not sure I understand how that would work, but I will do some research.

Mark Yuschak · Answer

You should get in touch with Marc Faulkner.  He's a note buying specialist here on the board.

Uwe S. · Answer

Mark,

Thats a little false the link^^ ;).
Here is the right Marc Faulkner.

-Uwe

Possible Note For Sale?

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