The best evaluation of a cashflow, carry back or trust deed note is based on how well the data is entered in the template, (Listing a Note). This discussion will answer many of the questions that are frequently asked during the information gathering phase of a trust deed, carry back or cash flow note.
Type of Property: SFR (single family residence)(Multi-Unit), (condo)(commercial building)(vacant land)(airplane)(boat/yacht).
Payor’s Credit: Do not guess!!!!! If you don’t know then put unknown. This is the person who is living in the property and is making monthly payments to the actual note holder.(most current credit rating is desirable) The payor may not be on property but maybe renting the building to a third party. In either case, the payor is making regular monthly payments to the individual that is holding the deed, cashflow or carry back note.
Property Value: The amount based on the latest Market Value, the sale price of the property, drive by appraisal, lending institution appraisal or professional appraisal. If none of the above are available then a value of property like yours that is being sold in your neighborhood.
Owner Occupied: The payor from above is, YES or is not, NO, now currently living on property.
Sales Date: Month/Day/Year of the sale of the note, carry back, or trust deed.
Sales Price: This is the sales price of the property in question. Not necessarily the Face Value of the Note. Do not round up or down.
Down Payment: Money the Payor gave to the seller of the property upfront before the cashflow, trust deed or carry back note was created. Do not round up or down.
State: Location of the property listed on the note.
City Location: City of the Location of the property listed on the note
Face Value of the Note for Sale: This amount is the balance of the Sales Price above minus the Down Payment. The Face Value MUST equal the total of the Sales Price and the Down Payment together. Do not round up or down.
Note Balance: Must equal the amount of the note based on the remaining payments, annual interest rate and the monthly payments as indicated on the cash flow, carry back, or trust deed note. Do not round up or down.
Interest Rate: The rate that is listed in the terms of the note you are selling.
When is first payment due: This must be one month after the sales date of the note. Or an explanation of why it is not one month later is needed.
# of payments made: count the first payment due date as #1 up to but not including the next one due as of today’s date.
# of payments remaining: count the next payment due as #1 until the end of the terms listed in the Note. This should equal the number of payments that you have yet to receive on a monthly balance until the end of the Note, trust deed, carry back.
Next Payment Due Date: This should be the date that you expect the very next monthly payment. If the due date is today then do not include this date, as the check is probably already in the mail to you.
Loan to Value: This is the total of the remaining balances (plural) if this not is in a 2nd or 3rd position or should equal the balance note if it is in 1st position divided by the Property Value that was listed above on this template. Example 1: Remaining Note Balance $43,000.00 (1sr position only) divided by the Property Market Value $100,000.00 = .43 (point 43)
This translates into 42% Loan to the Value of the Property or LTV.
Example 2 : 1st remaining note balance $2354.31, 2nd note balance $45365.00 = $47719.31, divided by the Property Value of $150,000.00 =
.32(point 32) or translates into 32% Loan to Value of Property or LTV.
Current or Delinquent: The payor has not missed any payments. None are any due prior to the Next payment Due Date. If today is the due date then presume that the payor has sent you the check and its in the mail on its way to you.
Balloon Payment: Yes or No
How Much Balloon payment : This amount must be accurate, do not round up or down. This should be the amount established in the terms when the note was created.
When Balloon Payment Due: This must be an accurate date, as listed in the terms when the note was created.
Position of the Note; Are you the only lien holder 1st or 2nd or 3rd. If you are the 2nd or 3rd, you must provide detailed information just like this template in the comments section for the 1st and/or 2nd position loans/liens (The terms set up in those loans.)
1st – Remaining Balance: The balance of the 1st position balance, do not guess. Do not round up or down.
2nd – Remaining Balance: The balance of the 2nd position balance, do not guess. Do not round up or down.
Contact First Name: Either your name as the note holder, or your Representative that has all the information available to them to answer any questions that come up concerning this note and the payor that is making payments to the note holder. (you)
Contact Phone : Your phone number or your Representative.
Contact Email: Your email or email of your Representative.
Comments: Questions you have. Think of these three questions. 1.) How motivated am I to sell my note, am I serious about selling or just shopping around. 2.) What do I NEED from the sale of this note? 3.) What are my EXPECTATIONS from the sale of this note
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment