Family lending to create a note
So let me preface this with the fact that I know nothing about notes or how to create one, so I could use some advice here...
Situation is this: My sister is moving to Pittsburg and realized its actually cheaper to purchase than to rent. They were driving a neighborhood, ran into a guy and started talking about what's for sale in the area. He is looking to sell and they're looking to buy, and the numbers they were throwing around were $150k. This would be an off market transaction, no local agents involved, but still full due diligence for inspections and appraisal. 10% down, 700 +/- credit scores, and good DTI.
What's the feasibility of me loaning her the balance of the loan after downpayment, creating a note, and then once it has a three or six month history of performance selling that note? What would be the expected gain on sale of the note, and how does that work? Anyone who has experience please respond or PM welcome. Thanks for the help, and look forward to hearing your thoughts.