Posted by John Merchant on August 05, 2003 at 17:56:08:
If the above is ALL you know, it’s way too little to make any intelligent determination about the value of the note.
Credit & value of the RE securing the note, along with info about other notes or liens on the RE…all these are very important to a knowledgable note buyer in determining FMV of the note.
Since the payments are covering interest only, the PV is remaining the same as the face, without change.
Does the note not have a due date?
Have you seen the note? If not, get a copy so you can see for yourself what it says.
If the note has NO due date, would you buy it? What would prevent the debtor from just paying it for next 50 years and never paying it off?
You just need to ask more questions until YOU know all these things…then you’ll be in an intelligent position to guage the true value of the note.
Until then, you’re just operating in the dark.