Selling performing 2nd position

[Victor Robinson]

If I were to agree (as a seller) to owner finance a portion a portfolio sale, but later decide I want the money out to reinvest, at what sort of discount would I likely be selling the note.

EXAMPLE:

Portfolio sale price: $1m

Owner finance 20%: $200k (take second position) 8%, 20 year amm, balloon in 5.

Let’s assume this is a performing note on a solid investor and principal balance is down to $190k with 4 years left to balloon.

How much would a note investor be willing to pay for this note? What sort of margin are they looking for in this sort of scenario?