Posted by Christi-FL on January 16, 2002 at 23:06:33:
I recently worked a deal to generate cash at closing for a non conforming property with SUNVEST INC. out of Northern CA. I approached Mike with the details on the property, the structure of the deal I was looking to set up and what the seller’s needed to walk with. He helped every step of the way and ended up buying the seller held mortgage at a discount to generate the cash they needed. You’ll want to talk to Mike Morrongiello at SunVest (707)939-9450 or MikeM@SunvestInc.com. This worked great for the non conforming property I found! I also got the benefit of a 30 year term mtg with no prepay penalty and no junk fees (doc prep fee, origination, points, etc!)!!
Creating notes to get cash upon closing… - Posted by Kristine-CA
Posted by Kristine-CA on January 13, 2002 at 16:44:18:
Hello. I have a question about the feasability about creating a note for a seller who needs cash. Let’s say the seller wants 20K cash. If we (the seller and myself) write a note for $25K, 15 years, 10%, and then sell it upon closing for $20K, it is my understanding the buyer would be paid out and now the note is between myself and the note buyer. The note buyer receiving a discount for a property that doesn’t qualify for conventional lending and for bringing cash to the table
My questions are these: who would buy such note? It would have no seasoning, and I would be the payor on it, and it would be collatarized by the house. So does my credit become an issue for a note buyer?
If I want to sell the house to a different buyer and create paper between the buyer and myself, at a higher purchase price and try to sell that note, who would buy that note? Again, no seasoning but a big discount.
I am unfamiliar with note investors and wonder what is in it for them. I have several deals that I could put together, with ready sellers and buyers if buying and selling the notes can be done with discounts and no seasoning.
Any help or thoughts appreciated. Thanks. Sincerely, Kristine
I noticed that this is an old message you posted up…but anyways. In your situation you are trying to do what’s called a simultaneous closing. That’s when an unseasoned note is purchased at closing so the note holder or seller would get cash at closing. There are several factors however that determine the value of that note such as credit, appraisal of the property, terms etc. You also asked what’s in it for us the note broker…either a comission from the funder for bringing the deal to them or from the sale of that note to another investor. If you are the buyer of such property there are no up front costs to you. I find this whole arena fascinating and hopefully will become more popular with real estate deals. Feel free to email anytime you have questions.
P.S. I am located in CA.