Finding note buyers for small PMM. - Posted by Thurman
Posted by Thurman on April 12, 2000 at 11:21:08:
I’m having a hard time finding note buyers who are interested in buying small notes or even hard money lenders who are interested in lending money on small loans. The notes or loan amounts are in the $10,000 to $25,000 range.
I work a five county rural area in south central Illinois. Many of the houses can be brought in the $15,000 to $25,000 price range. Presently, I’m interested in buying a two bedroom, five house with a garage located in a town of 14,000 people for a price of $12,500. This house is not a
junker, for it is in “ready to move in” condition and it would sell for $18,000 with seller financing.
My selling price $18,000
New buyers’ downpayment (5%) - 900
I would hold a 2nd lien PMM - 2,700
1st lien Purchase Money Mortgage $14,400
(balance taken back by me)
The $14,400 1st lien Purchase Money Mortgage to be amortized over 240 months (20 years) at 11.5% with a balloon payment to be due after 120 months (10 years). The balloon payment due will be $10,922.40 and monthly installments of principal and interest will be $153.58.
I would than sell the $14,400 note at a 10% discount for $12,960 and leave at a simultaneous closing, after paying my seller $12,500 for his property, with $460 cash.Would you answer two questions? 1. Would this technique of selling a note of a small amount work? 2. Where can I find note buyers interested in buying this small note? Thank you for your time and consideration.