It starts with a very direct question from your note seller. "Can I get full value for my note?" Right out of the gate, you have seemingly been boxed into a corner. It is a yes or no question, but in reality, very few note sellers will receive par pricing for their note. But they didn't ask for 100 cents on the dollar, did they? They asked if they could get 'full value' for their note. In either case, the response is most likely the same. You basically need to reply in a way that … [Read more...]
The Good, Bad, and Ugly Note Sellers
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When dealing with a mortgage note seller, what is the most important element of the negotiation process? The amount of the discount? How long it takes to fund? The reputation / credibility of your company? At the end of the day, it is none of the items listed above. Sure, some people will say “price” but the fact of the matter is the value of the note (your bid) is a much smaller piece of the puzzle than people realize. First off, everyone wants 100 cents on the dollar…or more. How … [Read more...]
Do Some Investors Pay Par Pricing When Buying Mortgage Notes?
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Recently we received a question in the Finding Cash Flow Notes training course related to “par pricing” or "discount" when buying mortgage notes. First off, here is the Note Broker Question… Hello and thank you two for all your help. My question is why would a note investor pay par for a note? I’ve been speaking with a person who helps their clients use OWC (Owner Will Carry). I was informed they are working with a note investor that is willing to buy a note for par. I don’t understand … [Read more...]
What’s Your Discount?
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How do you answer a note seller when they ask, “How much will you pay for my note?” The simplest answer to “What’s Your Discount?” would be “It depends!” But what you say next is very important. Here’s how we like to answer the seller’s first pricing question. “How much we pay really depends on your note. Each transaction is unique so we look to 5 key factors for pricing. These include the type of property, down payment or equity, the buyer’s credit, how long the buyer has been paying … [Read more...]
