All Forum Posts by: Ray Trounday

@Jamie Bateman

@Chris Seveney

So, if the payment is only paying down the principal.  If I go back to the original terms,

Loan: 140,0000

Payment: $255

Term: 360

After, 360 payments the borrower would not pay off the loan (255x360) = 91800 which leaves a balance of 48,200 so I am assuming and would need to review the note in detail. His payment due at maturity would be $48,200.  With the time value of money, I am not sure how the note holder ever intende to make money on this deal.  Something does not seem right or am I overanalyzing?

@Peter Grote

Could you outline the original terms of the loan?  Also is the borrower current with his payments.  This will factor into what you might be able to receive for the note.

Loan Origination Date

Original Loan Balance:

Interest:

Term:

P&I

There is at least one portal, PaperStac, that offers note holders a portal to advertise their note for sale.

-Ray

@Roman M.

How is IRR calculated differently than the standard Term, I/Yr, PV and PMT?

Is it safe to assume that at maturity, the original balance remains due?  Since none of the borrower payments will reduce principle.  Is this correct?

I came across a Performing note that has a 0% interest rate and -255.06 payment.  I am working on the assumption that the -255.06 payment is just interest and it does not pay down principle.  When I arrive at a Yield for this note, I get a negative number.  The original terms are as follows:

Original Loan: $140,000

Interest: 0%

Term: 360

Payment: -255.06

When I plug the numbers above in the financial calculator, I get a negative yield of -2.63%.  Why would anyone offer

a loan that returns a negative Yield?  Are they banking on appreciation of the underlying asset?  What is the resale of such a note?

It seems that I would need to take a serious haircut to entice someone to buy this note.  Thoughts?

@don konipol 

Do you happen to have an Excel formula that incorporates note paid off early, principal payment reductions or balloon?

Thanks in advance,

Ray

I would like to arrive at CapRate for performing note investments.  Is it simply the annualized interest income of the borrower payment divided by the market value?  Please advise.

Thanks,

Ray

I thought I would rekindle this thread rather than post a similar post requesting the same information since we are now in 2019.  I have a multifamily zoned R3 in N Phoenix and wanted to get thoughts from the BP community on roughly the cost/sq ft  to a build a 4-5 plex on .33 acre lot.  There is also the consideration of splitting the lot and building 2 single family residences.  I am not sure that is the highest and best use but thought I would throw it out there.  Thanks in advance,  Ray

I learned that the agreement is a non-circumvent agreement. What am I looking to achieve?  I am looking to protect my interests.   I don't wish to share particulars of the deal that I have yet to get under contract.  I want to create a contract that I may potentially wholesale to her or other investor. I don't want to create a contract that is not attractive to rehabber.. I would like to maximize my exit strategies.