My hard earned money on a 1st Mtg.? - Posted by Wilton

Posted by JohnWe (NoCA) on January 21, 2000 at 11:28:06:

At 60% LTV, sounds good to me! I’m no paper expert, but I would be real dilligent about fraud, and go for it.

There really aren’t a whole lot of ways to lose with a 60% LTV 1st. On a 30 yr loan, in 6.5 years, you’ll have your investment back, and have 13.5 years to enjoy cash flow, or sell it at that point to a notebuyer.

Good Luck.

My hard earned money on a 1st Mtg.? - Posted by Wilton

Posted by Wilton on January 21, 2000 at 10:49:36:

Looking for a L/O…what do I find?
They dont want to sell at all…want to borrow money. Not as bad as it first sounds…House value 85k. I have not confirmed the value, but I do know the area, and in my opinion it is well worth the 85. House is clear. Want to borrow 50K. 15%. 1st mtg. Im interested.
My nature is look for the ways to lose, hurdle those, then be happy with the deal.
I have thought of : Bankrupty & Death. Any other hazards?
Thanks for any help.

Re: My hard earned money on a 1st Mtg.? - Posted by Mark-NC

Posted by Mark-NC on January 21, 2000 at 11:41:41:

Right off the top it looks like a decent return. My only concern is if they own it free and clear why don’t they get a cash out refi at the bank? I would try to find the answer to that question and, what is their credit and job stability like.

One other thing you could do to protect yourself in case you ever need the cash back is write the note for about 10% more and discount the amount you give to them as points on the note. This way if you ever wanted out of the situation you could sell the note and recover your intial cash on the deal plus the interest you made. If you do decide to sell it later on make sure you have excellent records on their hopefully timley payment history, it will greatly increase your chances of selling the note for a good price.