what percent are note buyers buying performing notes at?

Question

i'm planing on buying houses using seller financing.  im thinking about winning over some sellers by lining up a buyer for the note at the same time.  Obviously this will only work if note buyers are offering a reasonable %.  Where are people usually trying to buy performing or new notes at?

Dave Van Horn · Answer

Hi Derek,

Good question! Now Seller Financed notes aren't my specialty (I prefer institutional), but I do have a lot of friends and colleagues that work in the space.  I would recommend contacting a trade desk to get a feel for their buying criteria (which would give you guidance on how to build your note). And since you're originating I would also recommend reading up on the SAFE Act because there are some limitations to what you want to do.

As far as percentages go, it all depends on who you're marketing to. Some people are perfectly fine with a 6% return, other people might lend hard money and would want something much higher so you have to be competitive. If you're dealing with senior citizens you might get a low rate, if you're dealing with savy real estate investors they may want something higher. To get around the competition, sell the note for less than it was originated to entice more buyers and increase the yield for the note investor.

Good luck,
Dave