Broker tape for a first note, or the neighbor who carried paper on his old house

UPB is unpaid principal balance, which took me embarrassingly long to stop looking up. So 78 of UPB on a 61k loan means you pay about 47.6k and the borrower still owes 61k, right?

The spreadsheet part is what would stop me cold. If the only proof the borrower paid is the seller's own record, how does anyone ever verify that? Bank deposits could be anything.

I'd take whichever one already has a servicer, and on the tape that's decided for you. My whole reason for looking at notes is that I don't want another set of tasks in my week. Setting up boarding, W-9s, escrow instructions and a payment portal on a one-off private loan is a project, and it's the kind of project that eats three weekends.

Still, @tender, 40 minutes away is not nothing. If it ever goes bad you'd rather the collateral be somewhere you can look at it.

Run the two prices against each other before either story convinces you.

Local note: 61k at 8%, say 20 years left, payment somewhere near 510. If you pay 47.6k, your yield to maturity lands around 11 and change. Tape note at 78 of a similar coupon gets you roughly the same place, so the pricing difference between the two is smaller than the sourcing story suggests.

So the real question is what each one costs you in cleanup. On the private note I'd assume title work, an assignment prepared and recorded, and possibly a lost or missing endorsement to chase. Recording fees and how quickly the county gets the assignment on record vary state to state. Budget 1,500 to 3,000 and the local discount stops looking like a discount.

What's wrong with that? The thing I can't price is what the broker pulled off the tape before you saw it.

I buy in small rural markets and being able to drive the collateral is worth real money to me, because comps out here are thin enough that an automated valuation is close to useless. Two sales in eighteen months, both weird.

If the local house is in a town you actually know, you can tell in ten minutes whether the value on the seller's file is fantasy. You cannot do that on a tape note four states away without paying someone.

Before you weigh either one, pull the recorded documents at the county on the private note. I have seen seller-carried paper where the deed of trust or mortgage was never recorded at all, which leaves you holding a promise with no lien position anybody has to respect. Recording practice and the effect of a gap differ by state, and that part is a question for a real estate attorney where the property sits, not for a forum.

The tape at least implies somebody looked. Implies.