How to Create Marketable Real Estate Notes 2

Real Estate Occupancy:

Statistically speaking, a payor who lives in his home as their primary
residence is going to keep up the condition of their property better
and pay more timely on a note than an investor/owner who may be
struggling to collect rents, keep up with repairs, or other bills,
etc.

This translates to more conservative exposure levels that are going to
have to be adhered to for a non-owner occupant/investor type payor. It
is wiser to sell to prospective buyers who are going to live in the
home, feel that they have some emotional attachment to the home, and
are more willing to pay a full �retail� sales price for the home than
an investor.

New sale or seasoned note

A note that has been newly created with no discernable payment history
established creates uncertainty and risk associated with this burning
question: How will the note be repaid?

Often even good credit payors overextend themselves when purchasing a
home, and all the extraneous expenses that go along with home
ownership (taxes, insurance, repairs, upgrades, furnishings,
utilities, etc.). A note that has even a few months of documentable
payments associated with it can often lessen many issues.

With lesser credit payors, the note may have no alternative but to be
seasoned in order to mitigate the risk and uncertainty and make it
marketable for sale.

If you have marginal payors that are going to be paying you, make sure
you have the ability to clearly document their payment history to you.
After a period of time the risk and concern over their credit
background becomes offset to a large degree by their performance on
the note.