What is this note worth and how to sell it?

Tax Liens & Mortgage Notes
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What is this note worth and how to sell it?

Ahmad H.
Rental Property Investor · New York, NY · Member since 2013 · 136 posts · 101 votes

Hi All,

I am in the process of selling a property where I will be holding the note for 280k (15yr term, 10%, 5yr balloon).  The property is worth 380k and I am getting 100k down from buyer. 10% return is nice on the 280k but I'd like to have a way to liquidate that note for another purchase if needed.

What would this note be worth? How to go about selling it? 

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Logan Hassinger
Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
7y

@Ahmad H.

You will be looking at a value at 90% to Par based on the Unpaid Principle Balance. 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    7y

    @Jay Hinrichs is correct, if its a commercial property and based on what you said it should be a commercial note. I am not familiar with the FC process on commercial notes in New York. I am shocked the guy is putting it in his name (especially if its a bar). That would be a HUGE red flag for me NOT to loan to him. The reason why is if it was a bar (that will be his use), it carries one of the highest incident rates of being sued. I would not deem it as being wise to place it in my personal name. Just my 2 cents.  

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  • Danny Redding
    Specialist · Columbus, GA · Member since 2018 · 28 posts · 13 votes
    7y

    @Kevin Vandenboss

    I had a 50k owner finance deal a few years ago with a 30 yr am and 2 yr balloon. 2 years came, and buyer couldn’t get approved for refi at the time. We did about a year long forbearance and they were able to get it all worked out in the end.

    But during that time I looked into First National and got offered roughly 70% of the principal balance and they did not understand that in this situation, the loan was done with $0 money down. It was a 100% finance at 4% and they kept calculating that I had received double the money that I actually had received. (Lets just say that I’ll never do any more family involved deals again)

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  • Ahmad H.
    OP
    Rental Property Investor · New York, NY · Member since 2013 · 136 posts · 101 votes
    7y

    @Chris Seveney I'll have to get more info on foreclosing on a commercial note in NY. 

    Sorry, I should have clarified that the new business is a grocery store and deli.

    @Danny Redding Thanks for sharing your experience. They probably didn't believe that you held the note for $0 and at such a low rate of 4%. 

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  • Danny Redding
    Specialist · Columbus, GA · Member since 2018 · 28 posts · 13 votes
    7y

    @Ahmad H.

    I was honoring the deal my late mother made with her niece. But yes, probably didn’t believe it even though I had an attorney do the closing and provided the settlement statement and all.

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  • Robert S.
    Contractor · Milltown, NJ · Member since 2016 · 297 posts · 213 votes
    7y

    @Jay Hinrichs Good evening, I have been approached by multiple investors that I do work for to fund their flips. What minimum dollar amount would you recommend as a minimum for requesting 3 points and 12% from the borrower? All are successful with good track records.

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