You hold more than one note: a handful of seller-financed sales, a block of lot contracts or a small fund's pool. We send the list to competing buyers and show you a price for each note as well as the whole.
A pool price can hide what each note is really worth.
The same worksheet comes with every offer.
| Remaining balance | $129,400 |
|---|---|
| Payments left | 168 |
| Buyer’s target yield | 8.0% |
| Purchase price | $115,000 |
| Discount from balance | 11.1% |
| Our fee | shown on every offer |
| Sell the whole note | Sell 60 payments | Keep it | |
|---|---|---|---|
| Cash today | $115,000 | $56,200 | $0 |
| Payments still coming to you | None | 108 payments of $1,140 | 168 payments of $1,140 |
| Total you receive | $115,000 | $179,320 | $191,520 |
| What you give up | Every future payment | The next five years | A lump sum now |
Illustrative example. Totals add up the payments as scheduled; they assume the payer keeps paying and are not adjusted for the value of money over time.
Loan tape or list of notesEach note and security instrumentPayment history for every noteAssignments showing you own each noteTwo or more notes owned by the same person or company and offered for sale together make a portfolio, which buyers also call a pool. It might be four seller-financed houses you sold over ten years, a few dozen lot sales from one subdivision, or a small fund’s mix of paying and non-paying loans. The notes do not have to match in state, property type or payment record.
A buyer of a pool starts from the loan tape, a spreadsheet with one row per note, and decides from it whether the pool fits what they buy. A row with blanks gets treated as a note with a problem. These are the columns a buyer expects:
A pool bid is one price for everything, where the strong notes carry the weak ones and the figure reflects the blend. A note-by-note bid gives each note its own price.
Ask for the note-by-note figures even when the bid is for the pool. As an example, suppose a buyer offers $400,000 for five notes. Broken out, that could be $95,000 for each of four performing first liens and $20,000 for a land note that is behind. Only the breakdown lets you decide whether that note belongs in the sale at all.
One buyer for everything is simpler: one agreement, one set of closing documents, one date. The price may still be lower than a split would bring, because buyers specialize. One who wants performing first liens on houses may mark down a land note or a late loan that a different buyer would price well.
We send the tape to buyers who fit different parts of it and set any pool bids beside the best split. Where the split wins by only a little, a single closing may be worth more to you, and you decide with both figures in front of you.
If three of your eight notes raise the cash you need, selling the other five gives up income you had no reason to sell. On a note with a steady payment record, a partial purchase can raise a set amount by selling only a block of upcoming payments.
A plain list is enough to begin: one line per note with the balance, the payment, the rate, whether it is paying, and the property address. If the pool mixes houses, land and business paper, mark each line with its type of note, because each kind goes to a different set of buyers. Enter the first note on the note pricing form and say how many others you hold, and we will ask for the rest.
Two or more sold together. There is no set threshold. A pool of three notes is handled with the same steps as a larger one, though some buyers only look at pools above a size they choose.
No. You can sell some and keep others, and we will show you bids both ways. If a few notes raise the cash you need, keeping the rest keeps that income with you.
Yes. We ask buyers for a note-by-note breakdown even when they bid on the whole pool, and the worksheet shows it. That is how you can tell which notes are holding the price up and which are pulling it down.
Yes. A pool can mix paying and non-paying notes. The two are priced on different things, the payments for one and the property for the other, so ask for the non-paying notes to be bid separately as well as inside the pool.