HELOC Notes @ 12.99% Return
Does anyone out there invest in HELOC notes? I usually work with first position notes and this is new for me.
The owner of the notes is offering no discount but guarantees a 12.99% rate of return. This is a good rate, but would put the investor in second position, right?
Any assistance is appreciated.
How is the guarantee made? Will the owner provide recourse and step up to fund any shortfall? Does he have the financial resources to step up?
If someone is willing to pay 12.99%+ in this market, there are likely credit and equity issues that may come back to bite you.