sold land, did owner carry and interested in selling trust deed

[Olly Cossio]

hey everyone,

i closed escrow last month on a land sale. buyer paid me half of the sale price (we'll call this the down payment), through escrow and he has 18 months to pay me the balance

the down payment already covered my cost of the land and put some money in my pocket too. the amount owed to me is all profit and with the economic uncertainty that is looming i didn't charge him an interest rate to make it more attractive to him and to seal the deal

this morning, i was looking at my USPS Informed Delivery email and see that I am going to be getting a letter from a company that purchases private notes and trust deeds, so I googled them and it looks interesting. I don't know anything about the trust deed purchasing space but I assume they want to cash me out and carry the note themselves, but not for free. I would have made calls to a few similar companies to start inquiring but it's Saturday morning.

I am guessing these kinds of companies are interested in making money off the interest rate being charged to the buyer but I didn't charge one to the buyer. They probably also want to buy it at a discount from me, so if the buyer owes me $10,000, the note buyer probably wants to give me $8,000, but i'm just guessing

anyone familiar with this space? i wouldn't mind cashing out but i can also wait for the buyer to pay me back.

in case any trust deed buyers are reading this, the retail value of the lot is worth more than twice what is owed, lots of equity in case buyer defaults. the buyer is a well to do fellow who purchased the 8 acre lot for his 3 children who are in the navy. they plan on using a VA loan to cash me out in a couple months but they aren't obligated to do so.

thanks!

[Chris Seveney]

Quote from @Olly Cossio:

hey everyone,

i closed escrow last month on a land sale. buyer paid me half of the sale price (we'll call this the down payment), through escrow and he has 18 months to pay me the balance

the down payment already covered my cost of the land and put some money in my pocket too. the amount owed to me is all profit and with the economic uncertainty that is looming i didn't charge him an interest rate to make it more attractive to him and to seal the deal

this morning, i was looking at my USPS Informed Delivery email and see that I am going to be getting a letter from a company that purchases private notes and trust deeds, so I googled them and it looks interesting. I don't know anything about the trust deed purchasing space but I assume they want to cash me out and carry the note themselves, but not for free. I would have made calls to a few similar companies to start inquiring but it's Saturday morning.

I am guessing these kinds of companies are interested in making money off the interest rate being charged to the buyer but I didn't charge one to the buyer. They probably also want to buy it at a discount from me, so if the buyer owes me $10,000, the note buyer probably wants to give me $8,000, but i'm just guessing

anyone familiar with this space? i wouldn't mind cashing out but i can also wait for the buyer to pay me back.

in case any trust deed buyers are reading this, the retail value of the lot is worth more than twice what is owed, lots of equity in case buyer defaults. the buyer is a well to do fellow who purchased the 8 acre lot for his 3 children who are in the navy. they plan on using a VA loan to cash me out in a couple months but they aren't obligated to do so.

thanks!

 we have bought and sold hundreds of loans. If you charged him zero interest, you would get pennies on the dollar for the loan. As mentioned, an investor will want a 15-20% annual return on that asset. If you were owed $10,000 it depends on what the payment is, but most likely at 0% interest unless it's a 12–24-month term you are going to get almost nothing. Inflation is 8% and you are charging 0% so you are losing money every month on that note. Never ever ever sell anything at 0%. Sidenote the IRS will not recognize it as 0% and make you also pay taxes on it as its interest based on AFR. So you are losing more $ every month which will be taxed as ordinary income.