Calculating spreads (profit) - Posted by Dan_MA

Posted by DanM(OR) on May 29, 1999 at 08:47:25:


Assuming a few things:

  1. You are brokering a note to an institution
  2. You received 79000 from the Note Buying Institution

Your profit equals 79000-76500=$2500
The Institutions yield equals = ??? (You need to know the note specifics) Their profit is 79000-90000=$11000

You need to be more specific in your question. However, I think this is what you are after.

Best of luck and have a great weekend!

Dan Matejsek

Calculating spreads (profit) - Posted by Dan_MA

Posted by Dan_MA on May 29, 1999 at 04:36:14:

After talking with Gino tonight and probably frustrating him with my inability to fully comprehend this subject I thought I would put it up on the board for myself and anyone else who might have a similiar question. We used an example similiar to this. Please note the numbers are arbitrary so they are easy to follow.

Sell price 100K
Downpayment 10K (10%)
Seller Note is now 90K
Notebuyer offers 15% discount = $76500.00
Seller receives at close a total of $86500.00

How would the person who brought this deal to the table figure out what the spread is I think I am missing a number?

Any help would be appreciated. I am new to this. This seems to be a quick way of generating cash. So considering I am no longer employed, probably due to spending too much time in the chatroom trying to learn how to really make money, a good shot of cash would sure help.