1st Mortgages - Posted by Scot

Posted by David Butler on January 18, 2001 at 14:45:52:

Hello Scot,

There’s been quite a bit of discussion on those very issues in just the past week, that you should find very useful… take a look at:





These will hopefully give you a front row seat in the process, or at least put you in the ballpark :wink:

Best of luck!

David P. Butler

1st Mortgages - Posted by Scot

Posted by Scot on January 18, 2001 at 14:06:19:

I have a house that I bought and fixed to flip. I bought this house on a line of credit so there is no underlying mortgage on the property. I would like to sell the house for $159,000, which is what the comps dictate, to people with not perfect credit with $5,000 - $10,000 down at about 11%-12% interest rate. I would then like to sell the note to a note investor.

How does this work? How much would I net? Do you now of any note buyers for house?

All help is greatly appreciated!

Notes sale = cash - Posted by Michael Morrongiello

Posted by Michael Morrongiello on January 18, 2001 at 21:54:50:

I am not sure what “not so perfect credit…” means?

Typically you would like to get at least 5% cash down from a prospective buyer and then also carry both an 80%LTV - %85%LTV 1st lien that would be set up with a 360 month amortization term and at the rates you suggested (11% -12%). The lattitdue on the Loan to value threshold and interest rate charged on the note will depend on the quality of buyer you have and their overall credit profile, their credit scores, employment, stabiliy, etc.

It is feasible to take back a 90% LTV 1st lien note if you can get a better credit buyer or one with 10% cash down.

The 1st lien note if structured correctly can bring anywhere from 92% to perhaps as high as 95% of its principal balance to you in cash.

Hope this helps.

To your success,

Michael Morrongiello