5 ms·

How did you buy a mortgage note? Directly from a bank, or from a fund? How much did you pay for it/what's the yield? (curious to see how the math works out)

• cko 11y ago
  From a fund. It was at 60% of the loan balance and the annual yield is roughly 12% before taxes.
  • charlesdm 11y ago
    Interesting - how much did you actually pay for it, i.e. what's the markup? I would assume you didn't buy it for 60% loan balance. Also, 12%? Did you buy that with 100% cash/equity, or a combination of equity and debt?
    • cko 11y ago
      I mean the purchase price was 60% of the loan balance (a 40% discount). I bought it with cash.
      • charlesdm 11y ago
        That sounds like a good deal !
        • cko 11y ago
          Yeah it was a "rehabbed" note. It was previously non-performing and so it's probably subprime. If you're curious check out pprnoteco.com
          • charlesdm 11y ago
            If it was non-performing, how did you convince the buyer to start paying down the debt again?
            • cko 11y ago
              I didn't do the negotiations, I bought it from a fund that handled that - new terms, new rate, etc. I'm not that savvy myself :)