Could someone explain this to me please?

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Posted by Neil Blatt on November 03, 2001 at 14:07:49:

I saw this on http://www.papersourceonline.com/wwrinfo.htm and I can not figure this out for beans. Could someone explain
this to me please?

A $100,000 property is offered with 10% cash down and a $90,000 note at 10% with a balloon in 5 years. You, as the note broker,
sell part of the note to an institutional note buyer at a 12.5% yield. They buy all the payments and $40,000 of the $90,000
balloon for $54,816. You give $44,816 to the seller of the note and keep $10,000 for commissions. The seller ends up with $104,816 in the following manner:

Cash Down Payment To Seller $10,000
Cash From Sale of Note $44,816
Cash in 60 Months From Balloon $50,000
TOTAL CASH TO SELLER $104,816


Thanks,

Neil Blatt

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