Hello, my name is Bill Syrios and I started... Stewardship Properties with the purchase of a home near the University of Oregon in 1989. Steadily our business grew from those small beginnings along with our expertise in real estate. If you’d like more information about us, please click here: Our Mission & Us. From the beginning our business involved all kinds of financing. Along the way we moved from just borrowing capital for financing our operation, to buying notes secured on real estate.
Here are some issues to consider when selling your note:
The Time Value of Money—and a Lottery Winner People inherently understand that they would rather have $100,000 today than the same amount spread over the next 15 years. The saying is not “Payments are King,” but “Cash is King!” Why? Because money a person has today is worth more than the same amount of money later.
In 2004, for example, a lottery winner won a jackpot of 162 million dollars. The winner had the choice to receive this money over 26 years or to receive a lump sum of 95 million dollars immediately. Even though they had to pay taxes on the entire amount, they choose to take the lump sum.
Why Did They Take the Cash Rather Than the Payments?
The net present value (NPV) of money used to make a lump sum payment is an interest rate of 4.5% per year. In effect, taking monthly payments equals receiving the winnings plus 4.5% interest per year. While 4.5% is more than historical inflation, it is less than the average return of the stock market. For a lottery winner to take a lump sum, they would thus conclude that they could reasonably expect to earn more than 4.5% per year on their money. Of course, there are many other reasons to take the cash now, both financial and personal.
Determining the Value of Your Note
As a note buyer, we calculate the net present value (NPV) of your note based on a number of factors:
The interest rate
Number of payments remaining
Payment amount
Along with the NPV we must consider the relative risk of the collateral the note is secured against:
Particular property on which the note is secured
Loan-to-value amount (LTV) of the note compared to the value of the property
Potential for the property’s value to drop out of neglected maintenance or market conditions
Length of the note’s payment history
Credit worthiness of the note payer
We Seek to Give You the Highest Value Possible
Our intention is to earn your business by giving you the most money possible for your note. We can purchase all or part of the note depending on your preference. Be assured that converting it into cash is a relatively simple matter that requires a minimal effort on your part. Once an agreement is made, all necessary documents are prepared and sent to you, and then returned to us via Fed Ex. At that point you receive a certified check—the photo of the cash below just makes it look more dramatic!
Our mission is to servepeople in their housing and financial needs. To that end we take our namesake seriously by seeking to be good stewards in all that we do. As you determine your opportunities and needs for additional cash, our hope is that we can be of service to you as well.
