Reasonable expectations of discount on created note sale - Posted by BankRobber
Posted by BankRobber on March 18, 1999 at 21:56:10:
I am investigating alternative methods of financing my short term property flips. If I owned a $100,000 property free and clear and created a 15% interest, 4 month ballon, $60,000 first Deed of Trust on it. Then advertised the Note for sale on one or more of the popular(?) note sales boards, what would be a reasonable discount that I would expect to have to sacrifice? 1%?, 2%?, 3%?, 4%?
I calculate that a 2% discount would yield an investor an annualized rate of more than 21%, but would this type of short term, unseasoned, less than arms length note be of interest to note buyers?
I will probably get flamed for this but why not just
“test market” the note by putting it up on the boards
and gauging the responses? If the offers are good simply commit to the terms and sell the note. If they are bad, you know you need to revise the terms to make it saleable.
Not the Institutional Note buyers, You would have to look for local private note buyers, or private money for short term. At 60% LTV you could just use a Hard Money Lender.