How do you determine the selling price of a performing note?

[Christopher Kelly]

What would be a fair value for this note? Original loan amount $106,000, 15 years, 8% interest. Perfect payment history of 31 payments since originated 6/30/13. 3000 square foot home/business located on highway 395 in Red Mountain, California. Zoned res/com. Current balance is $95,489 and has 149 remaining payments.

[Bob Malecki]

Hi @Christopher Kelly Well, you could also factor in the future value, but to keep it simple, just determine what a fair annualized return would be to a note buyer and price it at that amount. Based on your rate and term, looks like the monthly payment is around $1,013. 

If you were to sell the remaining payments at a 10% yield, then the sale price would be $86,259. The higher the yield, the lower the sale price. Hope this makes sense.

Originally posted by @Christopher Kelly:

What would be a fair value for this note? Original loan amount $106,000, 15 years, 8% interest. Perfect payment history of 31 payments since originated 6/30/13. 3000 square foot home/business located on highway 395 in Red Mountain, California. Zoned res/com. Current balance is $95,489 and has 149 remaining payments.