ARTICLE: FACE VALUE PLUS
(Or how to sell a $50,000.00 contract for $58,000.00)

Selling a note doesn't have to mean selling the whole note. Any part of your note or contract can be sold, and then sold again over many years.

As a seller of Real Estate, and receiver of payments, you can effectively "Have Your Cake" and eat it at the same time by selling series of payments on your paper, for instance..  A $50,000.00 contract at 8%, with payments of $500.00 per month would have a balance in 7 years, of $31,314.45.

If the seller were to sell those 7 years worth of payments in today's market, they could generate approximately $26,968.61. Then, at the end of that 7 year stream, the cashflow would revert to the seller at its scheduled balance. (About $31,314.45)

By selling in this fashion, the seller nets in two parts, a total of $58,283.06 for their $50,000.00 contract, or a premium of over $8,000.00.

Since 1980, about 1/3 of our transactions have been similar to this because of the elimination of perceived discount, and more money overall.

If you are even slightly concerned about your buyer's likelihood of performance, this approach may not be for you, but if structured properly could be used to your absolute advantage as well.

A short conversation with us should help to make an easy decision.

Contact Skip Foss now

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