Alireza:
If you mean can a seller financed mortgage (or trust deed) that was taken back or created as the result of a town home / condo unit being sold and that is secured by that property be converted into cash liqidity by selling the “paper” then YES, this is what is called the secondary market for real estate secured receivables. Mortgage, Trust deeds, land contracts, can readily be sold and converted into their so called “cash value” today even though the repayment terms on these notes can run for years and years.
Posted by steph in tex on March 28, 2000 at 09:19:26:
hello all-
i have several condo deals that have fallen in my lap.
i don’t want to have tenant headaches, so i’d rather hold the paper- then maybe discount it out if i need cash.
my question is this:
is there much of a market for notes secured by condos?
i can always hang on to them, but condos are not my area of expertise–at all! give me a house any day! so-
any down sides, or upsides?
i am just beginning to get into the note side of this business and don’t want to screw it up from the get go.
any input appreciated.
thanks
steph in tex
Condo paper can be readily converted into CASH. The collateral iteself is not quite as desirable as your “creme de la creme” owner occupied single family detached dwelling which would serve as collateral.
There is a market for condo paper, but the ITV is usually 5 % below a typical SFR deal. Since the collateral is unique and more difficult to market, the yields may be higher to resell or broker. On the other hand, a good payor on condo paper may give you a good opportunity to buy the paper for your own account at a better yeild. Less demand in the marketplace equals higher cash flow to you if you buy and qualify right.