In the final of the three episodes I recorded with John McCaffrey from Auction.com, John shares a back of the napkin calculation that he uses to determine potential note sale (NPN) deal size when he’s talking with a bank client.
John is a former Wall St banker and is currently an SVP at REDC (auction.com), his clients are top tier banks and he sells non-performing notes and REO for his bank clients.
There are two keys to John’s calculation the first is knowing the banks Allowance for Loan and Lease Losses (ALLL). The second is knowing the approximate percentage of Unpaid Principal Balance (UBP) that the market will pay, or if you’re the buyer what you will pay. This method is most effective with the smaller local and regional banks.
Listen to this short podcast episode to learn how to estimate potential non-performing note deal size.
This post has member only content. Learn more about how you can get access.
If you have questions about this or other podcasts in the professional podcast series please leave a comment in the box below. If you’re an expert and you’d like to share some of your expertise with other professionals in the distressed asset community please contact us and let us know what you have to offer. This website gets very highly targeted traffic and is visited by thousands of professionals looking for distressed assets, REO, non performing notes, data, and expertise.
Knowing this will certainly save a lot of time. I can laser focus on those institutions that can sell. Thank you for this. I’m so glad that I purchased this.
Awesome! Thanks Ruth, I’m thrilled it helped.
Thanks for the interview and tips to determine if a bank is ready. I like the bucket theory.