Need estimate for a single performing note

[Tim Silvers]

Am putting together a seller finance deal where I would be holding a first lien position and would be looking to sell the note. Here are the following stats:

1st lien face amount: $38000 

Current Market Value of subject property: $50000

APR: 8.00%

Term: 72 months, fully-amortized

Pre-payment penalty: none

To assess the exit strategy, what would be a reasonable expectation as to its liquidation value? I realize that letting the note season for a minimum of six months may add to its appeal. If there are any online platforms for estimating note valuations, I'd appreciate a posting of the links.

[Bill Gulley]

What type of property secures the note? What was the sale price? If a residence, is it owner occupied? Was the borrower qualified with a documented loan process in the origination? Credit score? Income and debt ratio? Who originated the loan? Can you verify the market value other than by the buyer's and seller's opinion? Was the down payment made with the borrower's own money? Did you get a Lender's Policy on title?

If any construction was done you'll need to hold it to get past the statutory period for liens and claims against the property. Less than a year is a new note.  

If everything is top notch, you might find a buyer at a 12% yield or about 33,800, usually seller financed notes aren't, 18-24% yield, unknown and sloppy, 50% of the UBP. LTV will be adjusted as well, depends on state and foreclosure time. :)