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Discounting Your Promissory Note To Sell – Part Two

Selling your mortgage note is a very competitive process

Cash-in-hand investors have thousands of competitive investing choices and opportunities available to them.

Corporate Stocks, Corporate bonds, Annuities, Mutual funds, Exchange Traded Funds, Real Estate Investment Funds, Municipal bonds, Private placement funds, Land, Apartment houses, Commercial real estate, Mortgage pools, and Individual Mortgage notes to name just a few.

When you sell your mortgage note all of the above investment products are your competitors. Since the main reason for investing money is to earn extra income, your note of income producing potential and safety must appeal to the investor more than any of the other investment products. Investors, consciously or unconsciously, compare your note to all of these other products in order to make their investment decision. The investor is like the judge at a beauty contest. All of the contestants are parading and smiling in front of the cash-in-hand investor-trying to look their best-in order to be crowned as the "the winner".

What determines the value of your promissory note?

Because the investor seeks a "stream of income" of a certain amount and risk of a certain amount, your note will be assessed -judged-by the investor.

Investors will compare your mortgage note to all the other investment products available to them. The following factors will be used in making the investment decision:

– Quality of the borrower – payment history, credit history, financial strength
– Quality of the collateral security – land, buildings, furniture fixtures and equipment
– Quantity of the collateral security – equal to, less than, more than the balance owed
– Term of the loan – 6 months, 60 months (5 yr.), 120 months (10 yr.)
– Terms of the loan – amortizing, balloon, monthly payments, annual payments
– Income generated – monthly, annually, upon reimbursement in full
– Default Provisions -…

Read More…. by Lawrence Tepper

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The post Discounting Your Promissory Note To Sell – Part Two appeared first on Note Investing Seminars.

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