Does anyone Insure a Note holder on a seller finance deal?

2 Replies

@Guil Rocha

Yes there is a way to insure the note. But its very expensive, very complication, and only suitable for very specific applications. I've used this method on very large and very distressed deals with great upside potential but significant risk. We used bond insurance to offset a percentage of the risk. You'll need a very good securties lawyer. Essentially You'll put the investment property in a corporation structured in such a way that you can issue corporate bonds. You'll then need a guarantor, high net worth, or an amazing business plan to convince a financial firm to provide bond insurance guaranteeing the bonds. If the deal is good enough to cover the extra cost and meet the underwriting requirements for the firm backing the bonds, that alone will prove you don't need the insurance.