Posted by Jered (WA) on April 01, 2006 at 11:41:19:
How much cash does the note holder NEED?
I would propose buying a partial. For example, offer $5K for 12 months of pmts. This is a yield of 73.3%.
==> The note holder gets $5K + a balance of the note ($8700) 12 months from now.
==> You get 73% yield, a 44% cash/cash return, and you have cut your exposure in ~half ($5K vs. $9K).
If all 12 pmts come in on time, do it again. In my experience, you can negotiate to purchase the remaining 16 months pmts at an even better yield.