Posted by Michael Morrongiello on January 08, 2001 at 16:15:24:
Having purchased thousands of seller created notes over the years in just about every state in the Union,here are the areas of concern any legitimate note funder will want to look carfully at:
*Type of property (residential, commercial, land, etc.)
- Property use and occupancy?
- Is note seasoned or newly created?
- If seasoned, is there a payment history documentable
- Is the note personally guaranteed by the payors?
- What is known about the payors credit profile?
- Payor credit scores?
- Payor employment and background?
- Payor stability on their job or what they do?
- What is the amount of cash if any put down?
- What is the starting (LTV) loan to value ratio
for the note?
- What is the existing LTV ratio for the note
- What amount of REAL equity does the payor have into
- Finally, what are the terms of repayment for
the note (interest rate, payment amount,
amortization, balloon or no balloon, etc.)
The way these criteria interact with one another will determine a transactions Strenghts and weaknesses, and ultimatly how the transaction is priced.
Hope this helps,
To your success,