Seller Finance - Early Repayment Request From Note Holder

[Matt Inouye]

Hello BP Community,

I have been approached by the holder of a seller-financed note (for a property I purchased from them) asking if I would be able to repay my note earlier than agreed.  They understand that it would have to be at a discount to the amount owed and would need to make sense for me.

There is roughly $360K in unpaid principle @4.00% and 311 monthly payments remaining. The monthly payment amount is about $1,800/mo. Am I in the ballpark that if I purchase this for $110K today, that it would yield about a 20% IRR? And also, since I am the borrower, am I correct in my understanding that I would be subject to a tax on cancellation of debt which would lower my total IRR.

I saw many years ago (like in 2017) on BP that note investors were shooting for 10-12% IRR in a zero-interest rate environement. Is it safe to assume that with rates much higher, that the target IRR is now in the mid to high teens?

Is there anything else from seasoned note buyers that I might need to consider before attempting to work a deal? 

I appreciate all of your help in advance.

Thank you!

Matt