Posted by John Behle on April 17, 1999 at 17:34:05:
In your case, a contractual purchase of the payments that subordinates the note seller’s interest to yours for safety would be the best bet.
In case of default, you are paid first which makes a partial purchase of almost any note safe.
Next question… - Posted by Sean
Posted by Sean on April 15, 1999 at 12:38:20:
Let’s say I find someone with a note for sale. It’s for 10% of the value of a property and a CLTV of 90% with payments interest only and a balloon due in a few years.
And let’s say that I agree that I will buy the payments on the note, but not the balloon because I figure there’s too much risk that balloon won’t get paid and not enough equity to make it worth my while. Obviously in this case I don’t want to use a compensating note. What are my other options?
Thanks for the info.