Posted by Mark-NC on November 22, 1999 at 08:21:31:
Bud,
I Know of that same program with the 90% LTV and 570 + score. If it is the same one, they do not let you flip the property like Brian is attempting to do and it reguires a full 10% down with no seconds and like you said it is full doc.
Just an FYI, if I am incorrect let me know.
Mark
Note experts and others, help on 1st contract sale - Posted by Brian
Posted by Brian on November 21, 1999 at 14:32:27:
I am selling my first rehab on contract. I have two potential buyers that are very interested. One of the couples has a credit score of 580 for him and 585 for her. I have told them I want a 10% interest rate on the note which will be about a $155,000 note with a 3 year balloon. They only have about $4,000 to put down. What else can I do in structuring this to make it the most attractive to sell to a note buyer. What amount of LTV will most note buyers go up to. I have an appraisal for the house at $173,000. What is the typical discount on the note purchase.
Thanks for any help in putting this deal together.
Thanks,
Brian
Re: Note experts and others, help on 1st contract sale - Posted by Bud Branstetter
Posted by Bud Branstetter on November 21, 1999 at 21:58:49:
Why do you insist on selling a note. What about a good mortgage broker. If you are really looking to sell a note I know of one buyer that does 90% with a 570 FICO and full docs. It depends also on what state. You are probably better to split into a second and a first that you sell and drop the balloon. What cash do you have to have out of the deal does dictate what you can sell for. You will probably have to have an appraisal from a national firm. Raise the price and soften the terms on the little second. There is no typical discount. Buyers base their decision on ITV, credit score, and return(interest rate).
Re: Note experts and others, help on 1st contract sale - Posted by phil fernandez
Posted by phil fernandez on November 21, 1999 at 20:25:21:
Brian,
As Mark said the note buyer is going to want to see at least 5% of the buyers money into the deal.
If I follow your post you are getting a $4,000 down payment and creating a note for $155,000 so the purchase price will be $159,000.
I would split up the $155,000 mortgage into two seperate mortgages. One being $127,200 as a 1st that you can sell at a minimal discount and a 2nd of $27,800 that you would keep and receive monthly payments on.
Re: Note experts and others, help on 1st contract sale - Posted by Mark-NC
Posted by Mark-NC on November 21, 1999 at 18:33:37:
Brian,
Most note buyers need at least 5% down to buy the note. And even if they do accept the 5% down you will probably have to bump the rate to get a decent buy rate.
As far as the LTV you may get a 85% LTV with that buyer but probably not a 90% like you have it.
Mark