Posted by Michael Morrongiello on July 09, 2001 at 23:58:45:
You really need to provide more specifics in order to complete the equation and address your proverbial question that most note holders or prospective note holders wish to know; “What will be the discount, if I sell the note…?”
Most note funders (including ourselves) will consider the most recent sales price of the property as its truest value as oppossed to what it may have appraised for. With some exceptions to this rule, this is indicative of how much of the mortgage industry works.
As for what a note is worth in cash today? The following factors and variable as they interplay on the transaction will greatly influence the answer to that question:
- Cash put down by buyers?
- Seasoning of payments on the note or none?
- Type, use, condition, and location of the property?
- What is known about the payors on the note?
- Their overall credit profile?
- Their credit scores?
- Are they personally liable to repay the debt?
- What do they do for a living?, how long?
- Finally, the actual repayment terms of the note (interest rate, payment amount, amortization, balloon or none, etc.)
Hope this helps…
To your success,