Is Buying later half of a partial note a scam for the buyer?

Question

Chris Seveney · Answer

@Anthony Howell

Typically a partial buyer buys the front end payments.

Buying back end with no cash flow today would need to be a huge discount And risk. If I were to buy a partial buy the front end not the back end.

Chris Seveney · Answer

@Don Konipol

My agreements would not pay $60k for an early payoff. It would have an accrued deferred interest of x percent per year and then once they start receiving payments an amortization table pay down so at any point in time the risk to me is coffered.

The seller would get crushed in instances like that. If you know anyone who is offering this let me know - I would turn around every time and pay the borrower $20k to refinance the note.

Bill B. · Answer

Usually wholesalers sell the front end to make themselves whole, get their money back,  maybe some profit. And then the later payments are bonus profit. I’ve never heard of someone buying later payments. Finding out 10 years later it was a bad deal is not good. And what if they refi, if you didn’t get a BIG discount you simply get your money back 10 years later with no interest.

John Underwood · Answer

Depends on terms. Is there a discount on note. Run the calculations to see your return.

Tracy Z. Rewey · Answer

My husband is fond of saying...

Is Buying later half of a partial note a scam for the buyer?

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