Posted by RV12 on December 03, 1998 at 12:46:18:

First of all, thank you for your reply.

Some clarification on the information that I provided.

The real estate investor, the source, is the payor for the notes, which is why I included his credit score.

He does his deals by creating 2 seller carryback notes, a 1st, which is sold to pay the seller of the property and from the proceeds of which the seller will credit to the investor an amount for closing costs and any cosmetic repairs, and a 2nd. The following is a typical example of one of the notes he has sent me. The interest rate, LTV, and terms will generally be the same for any of his deals, only the amount would change.

Sale Price/Appraisal: $100,000

1st: $80,000

2nd: $15,000

Down payment: $5000

Interest rate: 11%

LTV: 80%

Terms: 30 year fixed

Monthly Payment: $761.86

Type: Duplex, Tenant occupied

I understand that the discount on the note would vary from note to note. The “94 cents on the dollar” that I referred to is what the investor told me that he had received on his last note deal and what he would like to get on the notes sold for his deals to be profitable. What I would like to know, if possible, is would a discount of 94% on the notes sold be feasible on a regular basis? I hope this clears up any confusion that I might have caused. I fyou need any further information, please feel free to contact me at my e-mail address.