Florida Condo Mortgage Note Sale

The Note

The seller had created a seller-financed mortgage note on a 1,200-square-foot condominium in Fort Lauderdale, Florida. The property sold in August 2024 for $510,000. The buyer put down $290,000 in cash — a 56.9% down payment — and the seller carried back a note for the remaining $220,000.

The note was structured with a 6% interest rate and monthly payments of $1,319.01, amortized over 30 years but with a 72-month (6-year) balloon payment of $202,394.63 due in September 2030. The borrower was an irrevocable trust, which is less common than an individual borrower but not unusual in the South Florida market. No credit report was pulled at the time of the original sale, and no title insurance was obtained.

By the time the seller contacted us, the borrower had made 13 consecutive on-time monthly payments — just over one year of payment history. The property was owner-occupied.

How We Evaluated This Note

When we evaluate a note, we look at the same four factors every time: down payment and equity, borrower credit, payment history, and loan structure. On this deal, one of those factors was so dominant that it essentially overrode the weaknesses in the other three.

The down payment was extraordinary. The buyer put $290,000 cash into a $510,000 property, which meant the note at origination was only $220,000 against a half-million-dollar asset. The loan-to-value ratio at origination was 43.1%. To put that in perspective, we recommend a minimum of 20% down when seller financing a property. This borrower put down nearly three times that amount. When a borrower has $290,000 of their own money invested in a property, the probability of walking away from that investment is extremely low.

The weaknesses on this note were real, however. Only 13 payments had been made — just over one year of seasoning. No credit report was pulled at origination, which meant we had no verified data on the borrower's creditworthiness. No title insurance was obtained, which introduces documentation risk. And the borrower was an irrevocable trust rather than an individual, which adds a layer of legal complexity. We discuss these structuring considerations in detail in our guide on how to create a mortgage note for resale.

Despite those weaknesses, the equity position was so strong that the investor was comfortable pricing this note at 87.5% of the unpaid balance. The logic is straightforward: when the borrower has $290,000 at risk and the property is worth more than double the note balance, the collateral cushion protects the investor even in a worst-case scenario. If the borrower were to default and the property had to be liquidated, the note balance of $217,000 against a property that sold for $510,000 just a year earlier leaves an enormous margin of safety.

The 6-year balloon structure also helped. With a balloon payment of $202,394 due in September 2030, the investor has a defined exit point. The capital is not tied up for 30 years; the full remaining balance comes due within six years of origination. Shorter duration reduces risk, which supports stronger pricing.

What the Seller Received

The seller received $189,680.99 in cash at closing, which represented 87.5% of the unpaid principal balance of $216,832.19. The investor quote came in at $197,000.00, and after all transaction costs — title update, appraisal, and closing fees — the net to the seller was $189,680.99. The transaction closed on October 23, 2025. All closing costs were paid from the proceeds; the seller paid zero out of pocket.

What This Means for Note Holders

This deal proves the point we make repeatedly on this site and in our educational content: down payment and equity position are the single most influential factors in note pricing. Nothing else comes close.

Consider what this note was missing. No credit report. No title insurance. Minimal seasoning. A trust as borrower. On a different deal with a 10% or 15% down payment, those missing elements would have pushed the pricing well below 80 cents on the dollar. But with nearly 57% down, the equity position was so strong that none of those factors moved the needle in a meaningful way. The investor looked at the collateral cushion and priced accordingly.

This is why we encourage every note holder who is considering seller financing to collect the largest down payment the buyer can afford. A large down payment does two things simultaneously: it reduces the note balance (which is the amount you are at risk on), and it gives the borrower a financial incentive to continue making payments because they have significant cash invested in the property. Both of those dynamics work directly in the note holder's favor when it comes time to sell on the secondary market.

We also recommend pulling a credit report and obtaining title insurance at origination, even though this deal succeeded without either. Those are low-cost steps that remove uncertainty from the transaction and typically result in better pricing. The fact that this note overcame those gaps is a testament to the power of the down payment, not an argument for skipping them.

If you hold a mortgage note and you are ready to sell, we provide free, no-obligation quotes within 48 hours. Good luck.