FAQ: What every note investor needs to know

Q – Hi Tim,

Can you tell me what successful investors are looking for when they evaluate a privately-held note for purchase? In other words, what are the criteria that make up a good note in today’s market?

A – Hi Ken-  I like to see AT LEAST a 10% CASH down payment and a 15 to 30-year amortization with at least three months payment history (the longer the better).

Now, while the above example constitutes what I would ideally LIKE to see, in practice, we don’t always see notes that have these terms. However, don’t be afraid to submit a note of lesser quality to an institutional buyer.

Thanks for a great question — hope this helps!

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