Bought a fourplex in akron last year, carried the paper at 8% with a 7 year balloon, and I'm already wondering if I could sell this note to someone in year 2 or 3 if I needed the cash. Not sure if I can or what I'd realistically get for it that early.
You can sell it, though first check whether the paperwork includes a due on sale clause or any language that restricts transfer. Some seller carry notes get drafted without one, and that cuts both ways. In year 2 or 3 a seller is usually looking at 75 to 85 cents on the dollar depending on the borrower's payment history and the LTV at origination, because note buyers price seasoning hard in the early years. What was the down payment percentage? That one number will move your discount more than almost anything else.
Note buyers in the Cleveland and Akron market are discounting performing notes 15 to 20 percent off face right now.
