My second note deal went down last October, but… - Posted by Tom Nagle PA
Posted by Tom Nagle PA on January 26, 2000 at 21:28:05:
I haven’t posted here in a while, but I have a question about a note deal I did last October.
It was my first note deal, and I wanted to flip it. The only problem was - I didn’t flip it. I am still holding the note. I have $40,000 of my money in it that I would like to put into other deals. I have used it as collateral on two deals since then, but I wanted to get some ideas on the salebility of the note.
A few details of the deal.
House appraised by LSI at $59,000.
I had a buyer put down $10K and closing costs. The buyer and his wife have a Beacon of 535 and a FICO of 538. The buyer had a BK go through in June of 1998. My first mistake : the buyer started the paperwork in Jan 1998, so I thought since two years had elapsed, the salebility of the note would be greater. I didn’t know that the BK didn’t go through until June. The buyer hasn’t had any credit issues since then.
I created a first for $40,000 (67.7% LTV) at 11.75%, with a balloon in 7 years.
I created a second for the remainder, interest only, at 12% with a balloon in 3 years.
I thought I would wait until June to sell this, but I was wondering what I could possibly get for it now. I have a couple of local investors might be interested in it as well, but I don’t want to dry up that pool of cash. I am in no dire need to sell this, but I would appreciate any feedback as to what I could expect to get for it now.
Thanks and see you in Atlanta (hopefully at John’s seminar)!