Here are some tips to maximize the value of your loan
for the long term or to sell to a potential investor.
All loans are different of course. If you are interested in selling your loan right away or sometime in the future this is a best case scenario to command a high price from an investor.
• Make it a 30 year interest + principle loan.
• Fixed Interest Rate of 7.5 - 8.5% (higher if possible).
• Payments affordable for borrower.
• Buyer has credit score of 620 or higher. **
(Be careful of waiting to sell the note. Buyer might start racking up credit card debt buying appliances, furniture, landscaping, etc. and lower their credit score.)
• Sell property at full market value if possible.
• Get at least 10% cash down payment.
(You can do 5% but that lower down payment will be reflected in the price you are offered for the note.)
• 3, 5 or 7 year balloon.
** If you can't get their credit score, have them pull their own from one of the 3 credit reporting agencies (Equifax, Experian, and TransUnion), which they can do once a year for free at www.annualcreditreport.com.
Of course, there are lots of variables that work into a price offer including type of property, location, age of house, equity, is the buyer making the monthly payments, etc. These are just some of the things an investor likes to see. Investors buy all sorts of real estate notes and deeds of trust. Every house is different, every loan is different and every deal is different. Use the above list to make the loan more attractive to an investor.
