Know your target yield? Enter it below and we'll calculate the exact maximum price to pay — plus a smart opening offer so you have room to negotiate.
Fill in the note details above and click Calculate to see your offer price.
This tool answers the most important question in note investing: what is the most I should pay for this note? Instead of guessing or working backward on paper, you enter your target yield and let the calculator do the math.
Before you look at any deal, decide the minimum annual return you will accept. This keeps you disciplined. Most experienced note investors use these benchmarks:
You need four numbers from the note documents: the Unpaid Principal Balance (UPB), the monthly payment, the remaining term in months, and any balloon payment. All of these should be in the note's payment history or servicing records.
The calculator gives you two numbers: your maximum offer price (the absolute most you can pay and still hit your target yield) and a suggested opening offer (typically 5% below your maximum). Always start your negotiation at or below the opening offer — this gives you room to move up to your true ceiling without overpaying.
After you know your offer price, run it through the LTV Safety Checker. Your LTV tells you what happens if the borrower stops paying and you have to foreclose. A strong deal has both a good yield AND a low LTV.
Your max offer is the ceiling — the price at which your yield drops to exactly your target. Pay any more and your return falls below your goal. Your opening offer is what you actually say first in negotiations. Starting below your max gives the seller room to counter while you still come out at your target yield or better.
Most note sellers and brokers advertise a note by its face value or its monthly payment, not by yield — because a bigger monthly payment number looks more impressive in a listing. That's exactly why this calculator matters: it converts the seller's marketing numbers into the one figure that actually determines whether the deal makes sense for you. Don't let a big monthly payment number talk you into skipping the math.
If your maximum offer comes back well below what the seller is asking, you have three options: walk away, negotiate using the calculator's numbers as your justification (show them the math), or revisit your target yield if you believe the collateral is strong enough to justify a lower return. What you should never do is talk yourself into paying more than your maximum just because you like the deal emotionally — that's how yields quietly erode over a portfolio.
The offer price this calculator produces assumes the payment stream arrives intact. In practice several costs sit between the borrower's payment and your bank account, and none of them are in the formula. If you do not subtract them yourself, your real yield will land below your target every time.
Servicing is the largest recurring one. A licensed servicer typically charges somewhere in the range of $15 to $30 per month per loan, and on a note collecting $400 a month that is a meaningful slice of your income. Self-servicing avoids the fee but creates compliance obligations most individual investors should not take on casually. Then there are one-time transaction costs at purchase: an assignment of mortgage has to be drafted and recorded, and recording fees vary by county. Many buyers order a title report or at minimum a lien search, and any attorney review adds to the total.
A realistic approach is to decide your target yield, run this calculator, then subtract your estimated first-year costs from the maximum offer before you open negotiations. If you want 12% net and servicing plus closing costs will consume roughly a point and a half, solve for 13.5% and offer from there.
The most common way investors get into trouble with this calculator is treating the target yield as a fixed personal preference — "I'm a 12% buyer" — and applying it uniformly to every note regardless of what backs it. Yield is compensation for risk, and the risk varies enormously between deals.
A seasoned first-position note on an owner-occupied single-family home in a non-judicial state at 60% LTV is close to the safest paper in this asset class, and it will price accordingly. A thinly seasoned second-position note on a vacant property in a slow judicial state is a fundamentally different instrument, and demanding the same 12% on it is underwriting the risk incorrectly. Raise your target for weaker collateral, shorter payment history, higher LTV, second position, or a property type that is difficult to resell. Lower it, if you choose, only for genuinely strong paper.
The opening offer this page suggests is a starting point, and how much room you leave should reflect who is on the other side of the table. A broker marketing a note off a tape to a list of buyers is running a semi-competitive process, and an offer far below asking may simply get passed over without a counter. A private seller who took back financing on a property they sold years ago and now wants a lump sum for a specific reason is in a different position entirely, and often has more flexibility than they initially indicate.
It is worth asking directly why the note is for sale. The answer changes your leverage. Someone with a defined need and a deadline is negotiating differently than someone testing the market to see what their paper might fetch. Neither situation justifies paying above your maximum — but it does tell you how aggressively to open beneath it.
If the seller's asking price will not support your target yield on the whole note, the deal is not necessarily dead. You can offer to buy a partial — a defined number of payments rather than the entire remaining stream. For example, you purchase the next 96 payments, collect them, and the note reverts to the seller afterward with whatever balance remains.
This structure often works when a straight purchase will not, because the seller gets the lump sum they need without giving up the tail end of the asset, and you get a shorter, more predictable position at a yield you can actually hit. It adds legal complexity and requires careful documentation of exactly when and how the note reverts, so it is not a beginner's first transaction — but it is worth knowing the option exists before you walk away from an otherwise sound note purely on price.
Work backwards from the return you want. Decide your target yield first, then enter the note's monthly payment, remaining term, and any balloon payment. The calculator solves for the present value of that payment stream at your target yield — that figure is the most you can pay and still hit your number. Open below it to leave negotiating room.
Most performing first-position notes trade somewhere in the 8% to 14% range, with the exact figure driven by risk. Strong collateral, low LTV, long seasoning, and first position push yields toward the lower end because buyers compete for that paper. Higher LTV, thin payment history, second position, or hard-to-resell property types demand yields at the upper end or beyond to compensate for the added risk.
Because your maximum offer is the price at which you exactly hit your target yield and not a penny better. If you open there, every concession you make in negotiation pushes your actual return below your target. Opening beneath your maximum gives you room to move up during negotiation and still land at or above the return you set out to earn.
UPB stands for Unpaid Principal Balance — the amount of principal the borrower still owes, excluding accrued interest. It is the note's face value at a given moment, and it declines as principal payments are made. Note investors typically buy at a discount to UPB, and the gap between what you pay and the UPB is a meaningful part of your equity cushion.
This is the calculator I use before I ever put a number in front of a seller. My rule is simple: I decide my target yield before I look at the deal, not after. If I look at the numbers first, I start rationalizing a lower yield to justify a deal I already like — and that's exactly backwards.
One habit that's saved me more than once: I always run the opening offer 5-10% below my true ceiling, even on deals that look like a slam dunk. Sellers almost always counter, and if you open at your max, you have nowhere left to go but overpay.