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Promissory Note Structuring – Part One

How to structure your seller-carry note for maximum value.

Every flaw in your note will come back to haunt you when you try to sell it!

I have been actively engaged in the promissory note business for over 45 years. During that time I have bought, sold, exchanged, brokenered, appraised, and structured hundreds of notes. The lessons that I have learned, through my own mistakes and through the mistakes of others are numerous. I want to help you avoid "learning the hard way"!

If I were to expand and explain every lesson that I have learned the hard way, it would probably amount to writing a book-or two. I will give it to you here "short and sweet".

In outline form, I will share with you key concepts that will make your seller-carry loan more valuable, more salable, and more collectable. The following guidelines represent over 45 years learning the hard way, and I have the scar tissue to prove it!

Six critical elements needed to structure the note for maximum market value:

1. Get the highest interest rate on the note that you can

2. Get the largest down payment on the transaction that you can

a. Get additional collateral security-other real estate, co-signer, etc.

3. Get an independent third-party appraisal of the collateral assets before the closing

4. Get an agreement from the borrower that you can have permission to get independent third-party appraisals of the collateral assets after the closing, if and when you need them

5. Get all of the borrower's personal and business credit and financial information before the closing

6. Get an agreement from the borrower to provide updated credit and financial information after the closing, annually, or when you need them

Selling your Note

If you ever sell a private party / seller-carry loan, even if it is paying perfectly, you will be asked for all, or most of the above items. The more of these items you have and the more complete each item is, the…

Read More…. by Lawrence Tepper

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The post Promissory Note Structuring – Part One appeared first on Note Investing Seminars.

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