how to sell a performing note?

[Peter Grote]

I've got a performing note that I had not anticipated continuing to hold that I'm wondering what my options are for selling it? I loaned a relative money for him to purchase a home on a 1 acre parcel that he plans to subdivide and develop. His original plan was to quickly refinance the property with a business partner who unfortunately dropped out of the project. I'd like to get my $ back so that I can deploy it in my own RE projects and yet the bank loan that he qualifies for on his own would only give me 60% of my original capital back. I'm wondering where I go to possibly sell the note and what typical note buyers would be looking for? Rough numbers are currently $236k remaining on the loan at 6.35% interest.The property was just appraised at $285. Thanks! 

[Bob Malecki]

Hi Peter, you can post on Paperstac which has a growing audience and great tools for consummating the sale. Generally you want to price the note so that the buyer is getting a min 8% cash on cash annualized ROI, the higher the more attractive.

Selling a note with UPB over $200K could really narrow down your audience though. One alternative tactic would be to have him get refinanced and get your 60% return of capital, then put a second lien on the home for the difference for perhaps a 15 or 20 year term at a 6-9% interest rate. Once he makes 6 or more payments you can sell that performing, seasoned 2nd loan. With the UPB being much lower on the second, you would have a larger buying audience.

Bob