I'm looking for buyers of unseasoned notes - Posted by rachel

Posted by Tim on June 23, 2000 at 24:18:53:

Yes, one in Burlington. Actually they are not hard to find, just to find one that dosn’t want to discount you out of a profit.

I’m looking for buyers of unseasoned notes - Posted by rachel

Posted by rachel on February 21, 2000 at 11:49:50:

Hi! I have a house here I’m looking to buy. It’s a multifamily (4) house. The price of the house is 300,000.
The owner is willing to carry a mortgage but wants to sell part of the note. She wants to sell the first note of 140,000 and carry a second for 160,000. Does anybody know who would buy such a note? What kind of terms can I expect?
They want to sell the note at the time of closing. Keep in mind there is no money being put down by the buyer.Also I, the buyer, has good credit but I don’t work so I don’t have an income. The income on the property is 4500 a month.
Thanks in advance!

Re: I’m looking for buyers of unseasoned notes - Posted by Ed Garcia

Posted by Ed Garcia on February 22, 2000 at 01:52:16:


This deal is a no brainer. The $140,000 first is at 46% LTV. The seller can help
You refinance this deal by carrying back the second for $160,000 which is what
they’re doing. Now at that loan to value you can go anywhere to get a new first,
and that way the seller doesn’t have to discount the first.

Rachel, I am going to Atlanta in the next few days. I will be back next week.
I have what they call a no income no equity loan.

That means you don’t have to verify your income or your down payment up to
75% LTV.

With the seller not having to discount the first, we may ask them to lower the price
the same difference that they would have discounted their note. That, plus a good
rate, might get you that positive cash flow you have been looking for.

Jim Piper gave you the correct formula on the analysis of the numbers.

My number is (909) 944-0199.

Ed Garcia

Something to Think About… - Posted by JPiper

Posted by JPiper on February 21, 2000 at 20:50:49:


Looks like you have some qualified people willing and able to buy your note.

However, if I were you I?d focus a little more on your deal. It?s possible this deal may not cash flow. Here?s what I mean. If the property grosses $4500, then it?s possible that when you back out ALL of the expenses?..things like vacancy, taxes, insurance, snow removal, lawn care, utilities, repairs, and deferred maintenance etc??..that these expenses could easily total $1800-$2000. This means that your net operating income on this property is going to run approximately $2500-$2700.

Now the question becomes what the terms of your owner financing are. In order to help with the resale value of these note(s), the rate is going to have to be somewhat higher than the norm. If the rate is as an example averages 10%, amortized over 30 years, then your payment per month is going to be $2632. In other words, this deal is going to give you little or no cash flow.

Something to think about. You might want to play with the numbers. But do me a favor?.don?t assume that your expenses will be less than the estimate above.


We buy unseasoned notes - Posted by Judy Miller - American Note

Posted by Judy Miller - American Note on February 21, 2000 at 18:03:28:

You are in luck, Rachel. Because your seller is willing to carry back such a large 2nd, resale of your first, even as the buyer of the property, you don’t work. This should be no problem as long as you can show a positive cash flow resulting from the rentail of the property, and good credit.

The best advantage of all to both you and the note holder/property seller, is to sell a number of payments only, and leave the residual to the seller. Therefore, ask her “how much cash she’d like to receive now” and we can purchase just the number of payments necessary to render her the desired cash.

Or, we can restructure the deal, and have her take back a smaller 1st and a larger 2nd, and purchase the entire 1st. Or, if she needs all the money from the 1st, we can help structure the correct way to go about setting up this transaction to get her the maximum value.

Will this property be affordable for you if it is 100% financed and throws off $4,500 per month at the purchase price you are paying? This question will have to be answered in light of the fact you are not working. The property, plus all its taxes and maintenance expenses, will have to show a positive cash flow in order to have you be a qualified buyer at a no money down purchase.

If you need some help with this, we would be happy to work with you hand in hand to get both the seller and yourself the best value.

Judy Miller - President
American Note

Re: Something More to Think About… - Posted by Judy Miller - American Note

Posted by Judy Miller - American Note on February 22, 2000 at 24:19:09:

Great comments and analysis, JP. That’s where I was going in my comments, whether or not the property, if 100% financed, would cash flow out. And given the lack of down payment and the fact that the borrower is not working, in order for the property seller/note holder to take less of a discount, it might be advisable for the face interest rate to be EVEN HIGHER than 10%!

Your point is excellent. It is important for investors to look through your eyes, have this perspective, when trying to make a no money down, seller-financing transaction work. The key ingredient, regardless of the seller willing to carry financing, is that the property is purchased at the right price in order for the cash flow to work out. If it is not enough of a bargain, even the offer of 100% financing will not work out.

I would recommend perhaps that this investor go get a partner who could put up some cash, and add some strength to the transaction in the way of income. In that way, perhaps there could be positive carry, and the partnership could look to the property’s growth in value, and eventual increases in rent, as a long term investment, rather than as a cash flow earning potential at this time.

Judy Miller, President
American Note

Re: We buy unseasoned notes - Posted by Tim Velthuizen

Posted by Tim Velthuizen on February 24, 2000 at 14:43:53:

Dear Ms. Miller,
I am a junior investor living and playing/working in Ontario, Canada. I am building my database of lenders and notebuyers. Do you buy notes in Canada? Alternatively (spelling?) could you suggest any that you know of?
Thank-you for your time.
Tim V.

Re: We buy unseasoned notes - Posted by The Donald

Posted by The Donald on June 21, 2000 at 23:07:42:

Have you found any Canadian notebuyers - for Ontario, in specific, the GTA :slight_smile: ?