Posted by Chris on March 27, 2000 at 23:21:50:
John we would like to talk to you about note deals also. What is your e-mail address?
Selling Home via Owner Financing - HELP - Posted by John-AZ
Posted by John-AZ on March 27, 2000 at 10:41:14:
Can someone explain to me ITV/LTV?
I am attempting to sell my home via owner financing and then sell the note at the closing table. My property will sell at $100,000 and my buyer has 10 percent down. How do I figure out how to set up the note?
One investor said that they would pay 87 ITV for my financing if it was set up at 11% for 30 years. Another said that he would pay .92 buy rate for the first note of .9 LTV if it was set up at 12.25% for 20 years.
HELP!
Getting Top Dollar for your Owner-Financed Note - Posted by Judy Miller - American Note
Posted by Judy Miller - American Note on March 27, 2000 at 15:39:32:
We purchase thousands of notes. We work hard to get every seller top dollar. However, there are just a few variables here that these “cents on the dollar” quotes don’t help you understand.
The first good fact of your scenario is that your buyer is putting 10% verifiable cash down.
The next fact is that, if these people have horrendous credit, it is not likely you will get .87 or .92. If these people have terrific credit, then these figures are more realistic. Did anyone ask you about the credit of your borrower? Have you had your borrower fill out a 1003 Uniform Residential Loan Application? Before you jump at anyone’s offer of “cents on the dollar”, please take care of yourself by going through certain steps first so that you can actually consider any offer from a note investor as being RELIABLE. The way to do this is to have your borrower fill out the 1003 form, have your potential note investor pull their credit, and then determine what it looks like. Just the mere fact that a buyer puts down 10% does not guarantee that you’ll get top dollar if the borrower has bad credit.
If the borrowe has excellent credit, in order to get top dollar, you do not need to stick them for 12.25% interest on the face of the note. Any borrower that would pay that rate amount, and put down 10%, I promise you, does not have good credit. In the 11% range is going to be high enough, amortized over 30 years so that the monthly payment is affordable, perhaps with a balloon in 10 years which helps to minimize your discount when you sell the note.
I have a real problem with “shoot from the hip” quotes on notes without all the factors being considered. For example, where is the property located? Is it in an inner city, as a rehab? Inner city rehabs, particularly in Philadelphia or Baltimore, are not high on note investor lists right now. Too many losses. On the other hand, if it is in a decent area, even marginal, without high crime statistics, you are going to generate a lot higher return on your note.
So far I’ve mentioned the following factors that these “cents on the dollar” offers didn’t cover:
- Credit of payor
- Location of property
- 1003 Uniform Loan Application - which shows whether these borrowers can afford to pay the monthly payments and have the down payment, or where they are getting it from
- That the face interest rate doesn’t have to be 12.25% if you’ve got a decent credited borrower.
- Is this a flip and can you verify your improvements to the property that have enhanced its value?
There is more to consider, John. If you would like to review these with me, please feel free to e-mail me and we’ll help you maximize your “value”, without any bait and switch BS that we see too much of, to the disservice of good investors like yourself.
Judy Miller - President
Re: Selling Home via Owner Financing - HELP - Posted by Mark-NC
Posted by Mark-NC on March 27, 2000 at 12:04:29:
John,
I can get you set up with the best deal for your Note.
email me if you need help.
Mark