Posted by Jonathan RexfordFL on March 18, 2002 at 19:59:52:
Here is a question for the Note Professionals:
Okay I am having a Brain Fog
Say I built a house and have it on the market for $89,900. I offer it for owner financing on the following terms
Price: $89,900.00
Down: $4,495.00 (5%)
Loan: $85,405.00 (95%)
Term 360 months
Rate 10%
Payment $749.49Now I know that I could sell the note for cash at closing for a discount. I know that if I was going to do it. It might be better to structure a better down payment of at least 10% and split the deal in 2 mortgages one say for 80% and one for 10%. I know that the discount would be anywhere on the scale of what the discount should be for a unseasoned note with a rate of such as 10% and with the credit of the buyer. Now what I wanted to do is go to the private market place and Borrow from private individuals (that are qualified and know what the risks are). With the terms that I had stated above if my calculation is correct to borrow against the note at 12% they would give me $72,864.17. I know that the term is called hypothecation and some of the forms to use might be a colleteral assignment of mortgage. I understand that I will be collecting the $749.49 from my buyer and I will be paying my Lender that I borrowed the money from $749.49 each month. Now if I can help the buyer to refinance and pay me off and give what is owed to the lender and collect the balance which will be (not much) which would be a better way to structure this type of deal to help maintain the management of this type of investment? Would offer a lower yield? Or raising the buyers interest rate help? Is there some type software out there that could help with the management between my buyer and the lender that I borrowed the money when I decide to pay off the lender?
What I need is help to structure this type of deal and maintain some of the profit.
Thanks
Jonathan RexfordFL