Follow Up To Selling a Portion of Your Note...

I wanted to follow up to yesterday's post regarding partial and split payment note sales by providing some actual examples.

Let's say that you're happy with your monthly cash flow payments for your note, but suddenly you need to get you hands on some cash. Let's assume you want to buy a new house. You need $30,000.00 to close the purchase.

Here are the particulars on the note:

• Selling price: $100,000.00
• Down payment: $21,000.00
• Remaining balance amortized 20 years: $79,000.00
• Interest rate: 8.5%
• Monthly payment:$669.95
• 48 payments have already been made totaling: $32,157.76
• Current remaining principal balance owed on note: $71,767.32

Here is how we would structure a Partial Purchase:

We offered $34,500.00 for the next 60 payments. This more than fulfills the cash need of the seller. When the 60 payments go by, the balance remaining will be $60,892.03.

The note will be returned to the seller and they will again start collecting the payments. Let's see how it looks:

• Home seller received down payment: $21,000.00
• Seller received 48 payments of $669.95 totaling: $32,157.60
• We purchases next 60 payments for: $34,500.00
• Total cash to home seller so far: $87,657.60
• After 60 payments contract is returned to home seller with balance of: $69,323.93
• Home seller starts to receive payments again of $669.95.

When you add the total cash to the seller, plus, the remaining balance after 60 payments, it totals $156,981.53! And don't forget the interest they'll earn on the remaining balance.

Selling a part of a note (or Partial) can be a very profitable way to go!

Let's look at another way the you could do better. Again, we're dealing with the same contract we started with. The seller indicates they want to raise a limp sum of cash from the note, but they still need to receive part of the remaining monthly payments. It would place a hardship on them to completely lose the monthly income.

Can this be done? It sure can!

This is how we would structure a Split-Payment Partial Purchase:

We off the seller $32,500.00 for the right to receive half of the monthly payment for the life of the contract. The monthly payment is $669.95... half is $334.98. Let's see how this offer looks:

• Down payment to seller: $21,000.00
• Seller received 48 payments totaling: $32,157.60
• We offer to buy half of each remaining monthly payment for: $32,500.00
• Total cash to seller: $85,657.60
• Seller continues to receive half ($334.98) of the remaining 192 payments totaling: $64,316.16

Everything added up totals $149,973.76! Remember, the house sold for $100,000.00. A nice deal for the seller!

Could this same type of offer work if we had bought 60 payments only? Yes. We decide how many half payments we want, then we can make you a cash offer for them.

Let's assume this note has a balloon payment due in the 10th year. We could purchase the remaining payments only. The seller could keep the balloon for themselves.

In another example, we could also offer to buy half of the remaining payments. Again, the seller could keep the balloon and continue to receive half the payment for the life of the contract.

The above are just a few examples how you can convert a note or contract to CASH, and still keep the note's mothly cash flow. Remember, no two notes are exactly alike.

Give us a call toll free today at 1-800-349-6119 - Ext. 300 to go over your situation carefully with us. Mention our Partial Purchase plans. If you only need a certain amount of cash and want to keep your note' s cash flow, we can work up a plan that makes sense for you.