Here’s Your Cash Flow Business Tip of the Week

QUESTION: “Are appraisals done on any type of note OTHER than a real estate note?”


No. Only real estate notes.  A real estate NOTE appraisal is documented in much the same way as a real estate PROPERTY appraisal; the value of real property can be estimated with a pretty fair degree of accuracy from lender to lender, appraiser to appraiser, etc., give or take other valuation adjustments due to improvements in the property, etc. While there are many other types of NON-real estate cash flows that are bought and sold, the underlying securities carry considerably more variability and flavor and thusly you’re going to get much wider pricing fluctuations depending on who’s quoting or bidding so formal appraisals generally aren’t done on those. The other major variability you run into when appraising a real estate note is the payor’s credit score, but those variables can easily be factored into the buyer’s valuation formula so the quotes we get back from multiple institutional buyers for a given note tend to be fairly consistent when comparing one against the other.
So, to sum up, all the demand for appraisals are in real estate notes. Non-real estate notes, generally speaking, involve more of a “bidding” process when bought and sold.


P.S. We’ve had a sizeable influx of people coming in at the last minute to sign up for the note appraisal program. The response has been very strong and many smart cash flow practitioners who took advantage are being scheduled for orientations this week and will be receiving their materials. If you want in at this late hour, please heed this gentle reminder that this offer extension ends for good at midnight tonight Tuesday March 27 so forewarned is forearmed.
Here is a link to the offer:

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