Note Sale Options
Sale of a Seller Carry Back Note - A secured real estate note can be sold at any time from the day it was created until the day of the last payment. What is actually being sold is the right to collect the existing payments that are owed. A note holder can sell all the payments (full sale) or part of the payments (partial sale).
There are numerous options available to the note holder for full and partial sales. If the note holder is working with a knowledgeable note buyer, the note buyer can structure options designed specifically for the cash needs of the note holder.
Example Of A $90,000 Note On Which You Are Receiving Payments
Loan To Value = $84,257/$95,000 = 89%
- $90,000 Face Value Note
- 10% Interest Rate
- 15-Year Term (180 Payments)
- $967.14 Monthly Payments
Balance owed is $84,257.15
Sale Price = $95,000
Buyer’s Equity = $10,742.85
First Trust Deed = $84,257.15
Options Available To The Note Holder
- DO NOTHING: Continue receiving the remaining 156 monthly payments of $967.14.
- FULL SALE: Sell the entire note now. Note holder receives $66,229.43 now in exchange for assuming the rights to the Note for the remaining 156 months.
- PARTIAL SALE – FRONT END PAYMENTS: Sell the next 5 years of payments (60 payments.) Then receive the last 96 payments. Note holder receives $40,653.34 now. $63,736.86 will still be collected by the Note Holder for the last 96 payments. $104,390.20 is the total amount the Note Holder will receive over 156 months.
- FULL SALE – SPLIT FUNDING. Sell one half of the note now, the next 78 payments, and the other half of the note, the remaining 78 payments, after the first 78 payments are paid. The Note Holder receives $48,010.47 now. Then the Note Holder receives $48,010.47 again when the first 78 payments have been made. The Note Holder receives a total of $96,020.94.
- PARTIAL SALE – SPLIT PAYMENTS. Sell one half of each monthly payment and continue to receive the other half. The Note Holder receives $33,114.72 now and $483.57 per month for 156 months.
Many options are available and can be designed to fit your specific needs when selling your note. To find out what your note is worth CLICK HERE