Partial-Am I figuring this right? - Posted by David (NV)


#1

Posted by David Alexander on December 04, 1998 at 03:13:26:

the question during your conversation , something like,
If I could make you a loan against your note how much
would you need? That question will sometimes fish out
how much cash the seller is really after.

David Alexander


#2

Partial-Am I figuring this right? - Posted by David (NV)

Posted by David (NV) on December 03, 1998 at 24:35:43:

O.K. Here’s a note I’m trying to figure a partial on.

Note $26,500 @ 10% for 240 months. It’s in second pos. with high LTV. 15 payments have been made and seller wants to sell 120, leaving 105.

Now, for 24% yield, do I pay $12,638 and give a compesating note for 11,593 (43.75% which is amount of note seller retains).

Or, is the partial price based on 1/2 the face value of note, making the offer closer to 8,000 with same compensating note???

Or, am I thouroughly confused and need a therapist?

David


#3

Re: Partial-Am I figuring this right? - Posted by John Behle

Posted by John Behle on December 03, 1998 at 13:54:33:

My numbers come up the same as Bud’s. As he mentioned, find out more about the needs of the seller and then post it here and we’ll help structure it.


#4

Re: Partial-Am I figuring this right? - Posted by Bud Branstetter

Posted by Bud Branstetter on December 03, 1998 at 09:51:41:

My calculator says that 120 payments of 255.73 at 24% yield are worth $11, 598.73 At the end of 135 payments the principal balance due would be $17,848. I would think a compensating note would be payments of $255.73 for 105 months starting at month number 136.

If you can get them to accept a note for half then do so. That is one technique for buying notes. Offer to buy half the number of payments for half the balance due. That way you earn interest on the whole amount during that time and the yield goes up and up. Why not ask the seller what they want or will take for the compensating note.

Is a 24% enough for a high LTV. Would an offer of 60 payments for $5799.36(not $8889.40) with a commitment to buy the next sixty meet their need?