What Value would you put on this note?

[Mike McKinzie]

I am getting ready to sell a piece of property and carry the note. I won't hold anyone to this, but am curious what you think the note is worth. Here are the facts:

Sales Price: $580,000
Down Payment: $145,000 (25%)
Note Face Amount: $435,000
Interest Rate: 5%
Payment: $2,335 a month

Property is two on a lot, both have long term tenants, total current rent is $3,300 a month, soon to be $3,600 a month. I have a new roof being installed on both properties on Monday, August 6th. Front house was built in 1960 and back house was built in 1986. Fair market rent is about $4,000 a month. Buyer's credit rating is over 800.

While a lot of note buyers want 10% or 15% or more, there is no way I will discount it that much. I will just keep the note for income. My current mortgage payment is $1,000 a month, so my cash flow will actually increase, getting $2,300 a month with no rental expenses.

[Bill Gulley]

Have you already agreed to those terms????? I don't think you should be doing 30 yr. fixed rates, at 5% unless you want to lose your second shirt. What will interests be on CDs in 6 years, 10 yrs, 20?

I suggest you go to a 5 yr interval to reset the rate, you don't need a balloon payment to do so. A 5 yr adjustable would save you thousands if you did sell it later on.

You might search for "what do you want Mr. Note buyer" here in the threads, 200 posts trying to inform a seller how to do a note.