Partials are a great tool in a note investor’s toolbox to mitigate risk, but partials do not completely eliminate your risk. A partial is simply a note investing strategy that enables you to reduce your risk and still get some of the upfront cash to your seller. The dangerous side of partials is that they can give you a false sense of comfort when buying mortgage notes. … [Read more...] about The Dangerous Side of Buying Partials on Mortgage Notes
Investment to value
Sellers and investors often ask what ITV (Investment to Value) they should target when buying or selling a private real estate note. You may have seen that some note investors claim they will go 85, 90, even 95 percent ITV. Frankly, I have yet to really meet them when it comes down to funding a deal in the current market. As a refresher, the ITV represents how much is … [Read more...] about What is a Good ITV?
Around the country real estate markets have softened leaving a glut of inventory, decreasing values, and extended marketing times. The result? More sellers are offering to finance a portion of the purchase price for the buyer in an effort to “Move that House”! While sellers are motivated, lenders on the other hand are hunkering down or running scared. In the face of the … [Read more...] about The State of the Note Industry
You have probably heard a lot of acronyms thrown around in the note industry. Many have to do with note values and calculating price. Including LTV and ITV. LTV - Loan to Value LTV stands for Loan to Value. This is shown as a percentage. LTV tells note investors how much the buyer or payer owes against the property. It helps answer an important question based on the … [Read more...] about What is LTV and ITV?