Posted by David Alexander on April 14, 1999 at 10:58:02:
You should technically tie the note up first with an option. Then approach the payor and find out his situation. What can he afford? Can he afford the extra monthly above his normal payment? Can he maybe pay you some extra cash now in exchange for extinguishing the balloon? What is his credit like, can he refinance all or part of it?
If he could do this, now or in the future, Would he consider doing this now or in the future?
Know your exit your exit before buying. Make sure the yield you buy at is what you want, pryor to restructuring.