Has anyone actually mapped where their land notes sit on the credit curve and done anything with that information

The LTV exercise you ran is the right diagnostic and most operators doing volume on the terms side are, in my observation, running yield and stopping there. The fund guy's question exposed a gap that is common in this niche.

The assumption doing the most work in your Ohio logic is that familiarity with the asset equals recovery confidence. You know what you own in New Mexico, but knowing the parcel does not improve your basis if the buyer walks and your note balance sits above any supportable comp. Familiarity and recoverability are separate variables, and your own spreadsheet already showed they are misaligned there.

On the Ohio trade at 79 cents: the discount you are being offered reflects the fund's cost of capital, their servicing overhead, and whatever haircut they apply to rural land paper generally, not necessarily a precise read on that note's risk. 79 cents on a performing Ohio note with comp support is a real cost. You are selling future interest income plus principal recovery probability for liquidity today. Whether that trade is worth it depends on what you do with the capital, which I cannot assess, and on the note's remaining term and interest rate.

The risk you have not named is concentration in seller-financed paper with no secondary exit you control. You are effectively a lender with a single channel of liquidity, which is whatever a fund offers you on a given day. If you scale this before solving the exit infrastructure, you accumulate the exact problem you just found, just at higher face values.

One structural option worth understanding is whether your notes, individually or as a pool, qualify for any note-buyer market beyond the one fund you spoke with. Getting two or three bids on the same paper would tell you a lot about how the market actually prices your portfolio rather than how one buyer prices it.

A licensed attorney familiar with installment land contracts in each state should be in the loop before you sell any of these, given how contract-for-deed law varies by jurisdiction.

What is the interest rate and remaining term on the Ohio note, and is it a land contract or a promissory note secured by a deed of trust?

Most land note sellers run yield and stop, which is why the fund guy's question landed so hard.

The Ohio offer at 79 cents is probably the one worth scrutinizing more carefully, not less, because a buyer paying 79 on a note with comp support is telling you they see more exit than you do, and that gap is information. The New Mexico paper at 71 cents with no comp floor below balance is a cleaner offer in the sense that the discount is doing honest work: it prices in the walk risk you already identified. What you cannot recover from the Ohio sale is the spread between 79 and whatever the note seasons to if the buyer performs another 18 months. On a $61k face note that spread is real money.

The variable nobody in these conversations prices correctly is cure rate by county type. Rural notes in thin markets like Catron County have a different default dynamic than exurban Ohio parcels: when a Catron County buyer walks, you are not just back to owning land, you are back to owning land with no auction bid support and a 12-month carry before you find out. The fund priced that. The question is whether 71 cents captures it fully or partially.

On your portfolio mapping question, the people doing real volume on the terms side who are not tracking LTV by parcel with an updated comp pull at least annually are essentially running unsecured credit dressed as secured. The down payment range you described, $800 to $6,500 across notes up to $61k face, means your actual first-loss exposure is almost entirely in the note, not shared with the buyer.

What is the remaining balance on the two Catron County notes relative to face, and have you had any payment behavior signals from those two buyers?

The eight cent spread between those two notes is the fund guy telling you exactly what he thinks about Catron County without having to say it out loud. I am newer to the note side than most people in this room, but even I know that when a full-time buyer prices two assets that differently, he has seen the recovery scenario play out badly before. I looked at a parcel in Catron County about fourteen months ago, neighbor lot had sold at $4,100 cash and I was trying to figure out how to underwrite a $22k note on comparable acreage. I walked. What I cannot tell from your post is whether your New Mexico buyers are current or already showing stress, because a paying note on a bad parcel and a delinquent note on a bad parcel are completely different problems. Are they on time?

The Ohio-first instinct is backwards to me, and here is why: the Ohio note is the one the fund wants at 79 cents, which tells you the market sees it as recoverable collateral. If you sell that one you are left holding the two Catron County notes where, by your own spreadsheet, you cannot be made whole on default. You would be trading the note with exit optionality for the notes with none.

What I would actually do is flip it: take the 71 on New Mexico, absorb the haircut, and keep Ohio where presumably you have comp support and a buyer who can actually resell the parcel if you end up with it back. The gap between 71 and 79 cents is nine thousand dollars at most on a $61k face, and that is cheap insurance against sitting on a Catron County parcel that takes two years and a local broker to move. On the tracking question, I have never originated a land note but I have been in two funds that hold performing seller-finance paper and neither one was running anything more granular than yield and payment history until a capital call made them look harder. So no, I do not think most people doing volume are actually mapping this, which is exactly what made your spreadsheet conversation with the fund guy uncomfortable. What did he say when you told him your two weakest notes were the ones with no comp floor?

The Catron County picture is actually worse than no comp support, because the pool of people willing to buy distressed rural New Mexico on the open market is small enough that even a motivated seller takes a real haircut on time. I sold a note on a parcel in a similarly thin county in 2021, took 68 cents, and the buyer of that note eventually got the land back and sat on it for fourteen months before moving it.

What I can't tell from your post is what the underlying parcel cost you. If you're at 71 cents on a note where your basis is 40 cents of face, you've already won that trade twice.

The $800 down payment is the number I keep coming back to in your post. That is not a down payment, that is a deposit, and whoever took that probably had no real intention of closing emotionally on the land. I have a parcel in Kane County, Utah where I owner-financed to a buyer who put $1,200 down on a $22k note and he stopped paying at month seven when the well permit came back complicated. I was not whole either. Took the land back, relisted at $19,500 and sat on it for fourteen months before I found another buyer. The time cost on that is the thing you cannot put in the yield spreadsheet cleanly, but it was real and it was long.

On the 71 cents for New Mexico, that discount sounds steep until you factor in that Catron County has maybe eleven recorded land sales per year in the price range you are describing, and the fund manager pricing it at 71 already knows that. I would push back on your instinct to hold those and sell Ohio. Ohio paper at 79 with actual comp support underneath it is the one I would keep because your floor is real. The New Mexico notes are not just credit risk, they are liquidity risk and market depth risk stacked. What are the remaining terms on those two Catron notes, months left and monthly payment amount? That changes whether 71 is insulting or actually fair given where you sit in the payoff schedule.

@kevin_lombard would probably read this differently than I do since I'm on the passive side, but the fund offering you 79 on Ohio and 71 on New Mexico is telling you something pretty direct: the Ohio buyer has more to lose if they walk, and the fund priced that in.

What state are those Ohio comps pulling from, and how recent?

What state is the Ohio parcel in and what did you pay for it originally?

What is the note balance on the Ohio parcel relative to what a distressed cash buyer would pay today, because that gap decides whether 79 cents is a gift or a haircut?

Selling Ohio at 79 and holding the underwater New Mexico paper is the decision that feels like discipline and acts like a trap. That fund guy priced the Catron County notes at 71 because he ran the same recovery math you have not run yet, and he has a desk full of people who do nothing else.

What does your liquidation path actually look like on those two New Mexico parcels if you get them back tomorrow? Not the list price, the days-on-market number and the realistic close price given zero comp support under the balance.