All Forum Posts by: Edward Porada
Edward Porada has started 1 posts and replied 2 times.
Post: Creating a Discounted Note
- Real Estate Investor
- Johnstown, PA
- Posts 3
- Votes 0
Thanks Jon, for clearing that up for me. I see where I miscalculated the yield. Thanks Again.
Ed Porada
Sunberry Investments LLC
Post: Creating a Discounted Note
- Real Estate Investor
- Johnstown, PA
- Posts 3
- Votes 0
I'm a newbie at creating notes. I understand pretty much everything about creating a note and discounting it. I'm having a problem figuring out the yield. Here is my situation. I have a property I am trying to purchase for rehab and sell.
ARV - $ 110,000.000
Loan - $ 77,000.00 – 70% LTV
@ 13% interest for 12 months = $10,010.00 - Interest only payments
I will Discount the note - $2,000.00
Season the note by prepaying first 6 months payments - $ 5,005.02
Investor will fund only - $ 69,994.98
This is a 24 % YEILD if I am correct.
My question is if I sell the property in 2 months I will pay the investor $77,000.00 but the last 6 months of interest payments are not paid, correct?
And if that is correct, that changes the yield. Any information would be help thank you
Ed Porada
Sunberry Investments LLC