How to evaluate a partial purchase

[Ray Trounday]

Looking for sage advise from seasoned note investors, what are some the criteria that you use when evaluating a partial purchase of a performing note.  I suspect that is the much the same criteria when purchasing the full note.  Are there any nuances with partials that I should be aware of?

[Joshua Andrews]

Partials are great investments, both for the buyer and seller. The same due diligence you would apply to a note purchase, is the same used on a partial. This is because the partial is really just a "piece" of the note.

Yield is the best way to analyze the income potential and what your invested money is earning. Other thoughts on a partial is to make sure the amortization schedules are clearly spelled out, preferably in the purchase contract. There will be Amortization schedule A, and B. 

A is the buyers amortization, and B is the debtors.

Having these clearly spelled out will show at any point in time who is owed what money, in the event of a property sale or early payoff (which do happen).

Here is a great resource explaining partials. I have no affiliation with this company: http://noteinvestor.com/buy-notes/calculating-earl...

- Josh