Advice how to market a mortgage

[Houston Pitts]

I bought a property in 2004. Later one of the renters wanted to buy it from me. I sold it to him via owner finance. Some years back he could no longer pay for the home and was moving away. I took the house back for a fee. I then financed it again to a new owner in 2015. I am moving away and want to sell the note. It has a balance of $16,421.07 at 12%, maturing on 11-15-2022. It has been great income but I always wanted to be close to the property so I can check up on it from time to time. I have never wholesaled or sold a mortgage.

How do I sign over the documents and insure they follow the contract?

What is the best way to market this mortgage to another investor?

[Bart H.]

Originally posted by @Houston Pitts:

When you say discount what do you mean?  I would assume they buy the balance then collect the principle they bought it with plus interest.  

 Discount is a term that pertains to the time value of money.  A $1,000 today is worth more than $1,000 a year from now.

Basically the value of the stream of payments are 'discounted' to todays dollars by an interest rate (plus risk).  And that interest rate is compared to the risk free default rate (usually modeled as US treasuries to determine a fair value.  IE what is the value of owning the bond today based on the risk of being paid every month and being paid at a high enough interest rate to make it worthwhile.

So to sell that note, you will be 'discounting' the value of the stream of future payments to a point where it makes sense for an investor to buy it.  In most cases that price is a lot less to a third party investor than it is to you.

I hope that explanation helps.