It has been 12 years since the real estate market melted down. Do you know the most common expression when I am talking to Note Sellers even to date? Well in 2008 the property was worth (some high number). I just smile and respond. Ahhh the good old days. Why do I bring this up? Because there are to many people out there living in the past. Your body can’t live in the past so your mind also should not. Lets be real. In most parts of the county the value’s of properties has matched or exceeded the 2008 highs. BUT for the NON Major Market cities. That is not the case. Property values are still not to 2008 levels in MAIN STREET AMERICA. Because of this. When you come to sell your note on the secondary market. The property appraisal value is lower than what you think it should be. This creates an issue for note buyers like Northstar Investment Group. We can’t pay you as much because the Loan to Value Ratio is higher than the Risk assessment for your note allows. Right, sucks to be you right. Well not so fast. Instead of taking a much larger discount on that loan. We can do a few things. We can do a 2 Step purchase. That means that we agree on a price today. We pay you half of that agreed amount today. Then if the borrower makes 6 on time payments, we pay you the rest. If they are late then we subtract 1 full payment from the amount that we are to pay to you for each late payment. OR we can just purchase a smaller portion of your loan. This is know as a “PARTIAL” This is common in our business and it makes the discount much smaller as we are only discounting the amount of the loan that we purchase. There is a third option that I dare not speak of. That is you coming to the reality that you should have sold the property to the buyer for a 10% cash discount at closing and walked away with cash then. But you didn’t know that and you hadn’t met me yet and read this article. Now you know. So if you want to sell your loan. Give us a call. 1-754-223-9970
Sincerly,
Scott Schmitz
