All Forum Posts by: Scott Arpan

Joe,

If you are selling the note to one investor you will be fine. When you create a note and sell fractional interest to multiple investors is when you start to encroach on security regulations.

Sean,

I would use every advantage you have over the competition. If you live and care about the neighborhood make certain your prospects know and remember that fact. Try to stand out by giving your prospects something different and more interesting then the typical letter they receive from your competitor. I would include your business card and/or other item they will keep after throwing your letter away. They may need it later.  I believe the best response comes after the prospect has received your letter the fourth time.

If your list is small, a hand addressed envelope will get opened more often then a typed address. A friend of mine pays high school kids 25 cents per letter for had addressing.

If mentioning your RE license is optional, test to see if that makes a difference in your response rates and closing. Send half your letters mentioning you are licensed and the other half with no mention and see if it makes a difference. 

John,

I can help you figure a market value for your note.  I don't know if this note is something I would buy since I prefer to stay closer to home but I could put a pretty good estimated value on your note.

You can post the information online for all note investors to see and comment on or send the information in a private message to me if there is something you don't want to post online. 

The value will depend heavily on the amount of equity the buyer has in the real estate, the buyer’s credit and timeliness of payments. Buyer's ability to manage the store, store location (demographics, access, traffic counts etc), store upkeep, clean environmental reports also play big roles.

Unless you have a strong note in all three areas, you will likely not be able to sell more than 3 or 4 years worth of payments at a time.

Scott

Ben,

Quickly using my calculator it looks like a 25.5% assuming the balloon pays off in November 2016. I based this on a current balance of $24,781 with the July payment already made.

I don't know anything about your market, but I would by cautious about how the balloon payment will be made. Will a lender (conventional or private) in your area be willing to finance the balloon? If you are looking for passive income, validate to pay history and perform enough due diligence you are comfortable payments will continue.

I use an old school HP12C to calculate yields and cash flow. I understand the are apps that will do the same thing and are much easier to master.