Selling Notes - Interest Rate
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Interest: 2-4% above conventional interest rates unless a mobile home or land.
Why?
If an interest rate is low the investor will have to discount the note even greater to get the return the want.
For example 30 year; $100,000 note and the investor want a 20% return or yield:
6% interest originally on the note = $35,879 offer from an investor.
10% interest originally on the note = $52,517 offer from an investor.
14% interest originally on the note = $70,907 offer on from an investor.
As you can see the higher interest I set when I create a note the higher my offer is from an investor. So why don't I just charge a high interest? Why am I restricted to 2-4% above common interest rates?
Investors get scared of too high of interest rates. They often think something is wrong with the payor and will not buy. Investor will think why couldn't they have gotten a loan with better interest rates.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125