Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
Lately my mode of investing has involved flips. In order to get top dollar when I resell them, I offer a land contract.
However, I don't want to be holding all this paper. So, going forward I want to sell the paper to a note buyer.
For all you note buyers out there - what terms would yield me the highest return when I go to sell this paper in the secondary market? Higher interest rate? Higher down payment? Shorter terms?
Real Estate Consultant · New York, NY · Member since 2009 · 3 posts · 0 votes
17y
Hi,
Seconds are our specialty however we would need more information on one of the notes. Yes higher interest rates and down payments help. A decent credit score won't hurt either. More seasoning is always good but not necessary to sell the note.
Please email me off site to discuss this further.
Dove Note Liquidators.
[EMAIL REMOVED]
Investor · Kalamazoo, MI · Member since 2009 · 1k+ posts · 495 votes
17y
Mark,
You are smart to research how to structure your notes to make them appealing to investors. I suggest that you carry back a first position land contract at no more than 80% of the property value. I would pull credit and make sure your buyer has at least a 600 credit score and can demonstrate the ability and desire to pay. Also you are correct in assuming that you want to charge a rate that is a couple of points higher than current market rates. In general most are charging from 9 to 10.9% to reduce the discount required. As for terms you can amortize the note over 30 years to keep the payment affordable to your home buyer but, I would include a 5 to 7 year balloon which will give the note buyer/investor some flexability. 6 months seasoning is a good minimum to go by. Make sure you make copies of all checks you collect and deposit slipps so you have actual proof of your payment history. Please note that I have a more complete explaination of this process on our website. I would love to work with you! Please let me know if you have any more specific questions.