Posted by John Behle on January 25, 2003 at 14:23:21:
In Reply to: Over Face Value? posted by Doctor Samm on August 12, 2002 at 12:39:22:
You can not pay more than face value for a note. They could pay it off immediately and you would face a loss, unless there were an enforceable pre-payment penalty. Even then, you have no profit, and have wasted your time and money.
Most note buyers have a minimum discount just to make any note worth their while. The first note I ever went to sell was at 21% interest and the market yields at that time were 18%. The buyers all wanted a 25-30% minimum discount anyway. I kept the note and decided to invest in notes more myself.