Image Source
THE SCENARIO
If you own a note, it might be possible to sell it rather than continue collecting payments, and get an even better return than you otherwise would have.
For example, let's say that I buy a fully-amortizing note for $79,000 with an unpaid balance of $100,000, a payment of $898.83, and remaining term of 15 years. I collect payments for 3 years, then sell the note to Brenda, who wants to make 8% on her money.
The question: What is my overall return on my $79,000 initial investment?
THE SOLUTION
This one has a couple of parts.
- Find out how much Brenda is willing to pay for the last 12 years of the note.
- Find out my return on my ... Read more...
