Posted by Michael Morrongiello on October 31, 2008 at 21:19:08:
In Reply to: Selling Note posted by Denny on October 30, 2008 at 06:30:49:
Denny:
I can appreciate what your trying to do... however let me throw a realistic "fly in your ointment" in illustrating how a "paper" investor might view this deal;1) The age of the "wobbley box" excuse me Mobile home is VERY old- your talking about a 30 year old home!
These older trailers are worth VERY little unless they have been added on to with permanent additions, have roof overs, or complete upgrades. Better to stick to later model year homes (1984 or newer)2) The buyers down payment is WEAK. They are only putting $1,500.00 at risk. Thats NOTHING and especially in todays market place where there is heavy focus on EQUITY (established via a strong down payment or amortization) and CREDIT. High LTV -loan to value financing on a Mobile home land /combo type collateral would be perceived as having TONS of risk.
3) The 180 month term is fine... that does allow for some amortization to take place faster than a 240 month or 360 month amortization term - which would be considered disasterous on an older trailer like this. I would even consider 120 months -144 months FULLY AMORTIZED
4) You did not mention anything about the payors credit - as alluded to above, in TODAY's market the payors on "newer" seller financed paper where there is not a long track record of payments MUST be relatively clean. Suggest 650+ credit scores for their middle credit score.
If you can afford to hold the Note (what we call; "Tote the Note") for a year or longer then the credit score requirement can be far less (maybe down to 620)- Any thing less < than a 620 middle credit score will have to be SEASONED For quite some time
5) The value of your example note is going to be tough to price - as their will be VERY few takers for this deal given all of the above negatives.
That will change ONCE a payment history for some period of time 6 months to 12 months or longer takes place.
Hope the above helps....
Continued best to your success;
Michael Morrongiello
Paper Practioner
www.sunvestinc.com
Author of the following home study courses;Paper Into Cash - The Convertible Currency - How to Effectively Create Marketable Real Estate Notes
&
The Unity of Real Estate & "Paper" - Advanced techniques for both the acquisition and disposition of properties using Real Estate "paper