Seller Subordinated Carrybacks on MF
Hello BP Nation:
On MF transactions, Sellers often will carryback a subordinated note (junior to the bank note) in order to lessen the upfront capital requirements of the Buyer.
Can someone tell me more about the nature of these notes? A few specific questions...
- Do these typically amortize, or are they interest only? If amortizing, are they usually ~25 years? More? Less?
- What is the interest rates on these? ~7%
- Do they 'balloon' at 5/7 years? I can't imagine a Seller wanted to hold my note for a full 30 years...
I'm looking for *typical* information; I understand that this will vary. I'm seeking 'ballpark' info so that I can structure offers in a realistic way that maintains/builds credibility.
I'd love @Joel Owens 's input, since I've always valued his input and experience-based market insight. Thanks to all!