Reasonable expectations of discount on created note sale - Posted by BankRobber

Posted by Reif on March 22, 1999 at 21:00:42:

Has anyone had any experience with these boards, good or bad? I was think about plunking down a couple of bucks to check them out.

I’m guessing though that that is a sellers’ market - I’d imagine some of the bigger fish bidding down the yields.

Anyone?

Reif

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?

Re: Reasonable expectations of discount on created note sale - Posted by Ben

Posted by Ben on March 20, 1999 at 08:54:44:

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.

Re: Reasonable expectations of discount on created note sale - Posted by David Alexander

Posted by David Alexander on March 19, 1999 at 11:02:28:

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.

David Alexander

Thats what I’d like to know too - Posted by Jim IL

Posted by Jim IL on March 19, 1999 at 08:14:01:

Because then I’d have a better clue as to “how much” to write the note for.

Re: Reasonable expectations of discount on created note sale - Posted by BankRobber

Posted by BankRobber on March 21, 1999 at 22:26:42:

I was under the impressions that these boards charged a membership fee. Am I correct, or is the fee only for reviewing available paper?

Re: Reasonable expectations of discount on created note sale - Posted by Ben

Posted by Ben on March 22, 1999 at 08:26:45:

Correct, there is no fee for posting notes for sale, only to review what is available. Ben