A 24-unit seller is carrying the note himself and his payoff demand is higher than what any buyer will underwrite
The seller bought this building fourteen years ago, refinanced twice, and the current payoff on his private note sits at $2.31M. Every buyer running a standard underwriting at a 7.8 cap on the actual in-place income arrives at a value somewhere between $1.9M and $2.05M. That $260k to $410k gap is not a negotiation problem, it is a math problem, and no amount of buyer motivation closes it without structural help. The assumption doing the most work here is that the seller's payoff number and the market's value number are connected, and they are not. What he owes has nothing to do with what the asset produces. The contract is tied up with an assignment clause, the earnest money is $25k hard at day thirty, and the clock is at day nineteen. Three things could theoretically move this forward. The seller accepts a short payoff, which means his noteholder has to agree and has to have a financial reason to do so. A buyer comes in with a structure that gives the seller some future participation, a small carry or a profit share, so the seller nets less at closing but gets something later. The contract gets terminated before day thirty and the deal goes back to the seller with a conversation about repricing, which means walking away from the marketing time already spent. A short payoff on a private note is cleaner than a bank short sale because there is no servicer committee and no regulatory clock, but the noteholder still has to take a loss and will want to see a hardship case or a BPO that supports the discount. If the noteholder is an individual, that conversation can happen in a week. If it is a fund or a family office, expect a longer process than the current contingency window allows. What is the noteholder's situation, a private individual or an institutional lender, and does the seller know whether they would even take a call?
