Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Private Lending & Conventional Mortgage Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago, 07/29/2017

User Stats

1,689
Posts
2,209
Votes
Will Gaston
Pro Member
  • Rental Property Investor
  • Columbia, SC
2,209
Votes |
1,689
Posts

How should/could I ask my note holder for a discount?

Will Gaston
Pro Member
  • Rental Property Investor
  • Columbia, SC
Posted

All:

I have 2 seller financed properties that I am looking to refinance with my portfolio lender to take some cash out. Both of these properties were purchased in early 2016 from two different owners. 

Note #1 is a 20 year AM that started at ~103k and has been paid down to ~98k and has a current LTV of ~58%

Note #2 is a 15 year AM that started at ~170k and has been paid down to ~160k and has a current LTV of ~64%

The interest rates on both of these are 4.625%. I could be wrong about this but my intuition is that most note holders will take a discount to be paid off early. However, both of these owners are retired and in their late 60's/early 70's. Their lien position they have is pretty secure, especially with a shorter amortization. Not the greatest interest rate in the world, but their stage of life requires less risky investing. 

My question is this. What is the best way to approach a note holder to ask for a discount? 

For what it's worth, I have a great relationship with both. I transfer the money directly into their account a week before the due date every month. It's always early and they don't even have to go to the bank. It's easy and safe. 

So how can I convince them to take less?

  • Will Gaston
  • Loading replies...