Jeff Armstrong provides Nationwide Valuation Appraisal Services for Secured and Unsecured Promissory Notes. If you need a Valuation Estimate or an Appraisal of today’s cash value of your secured or unsecured notes, for the purpose of Estate Planning, Financial Planning, Income Statement Preparation, Balance Sheet Preparation, or any other purpose we invite you to contact us today.
Why a note or cash flow appraisal?
For the following reasons (and more):
- Estate Planning
- To save you or your clients from overpaying taxes.
- A note in an estate being probated may need to be appraised.
- Notes invested in a pension/profit-sharing plan may need annual valuations.
- A client may be receiving payments from a personal injury settlement.
- Perhaps one party in a divorce settlement accepted a note as his or her share.
- When a client needs to sell part or all of a note for cash, he or she may want an independent source to set a price on a note. The math is only a part of the valuation process.
“Jeff, I just wanted to express my appreciation to you for your assistance, promptness, and expertise in providing me with an excellent professional appraisal. I won’t hesitate to recommend your services to others.”
~ Elizabeth P.
What are some examples of note appraisal situations that we can help with?
- Secured or unsecured notes
- Business notes with/without real estate
- Seller Carryback notes from sale of real estate
- Seller Carryback notes from sale of a mobile home
- Promissory Notes–Trust Deeds–Mortgages
- Personal notes
- Gift notes
- Bank notes
- Commercial notes
- Property settlement notes
- Partial Interest notes
- Real estate notes
- Performing notes
- Discounted notes
- Non-performing notes
- Defaulted notes
- Estate notes
- Probate notes
- Intra-family notes
- Installment notes
- Demand notes
- Divorce notes
- Royalty payments
- Lottery winnings / structured settlements …and more.
What determines the value of a cash flow or a note?
Many considerations are taken into account when determining the vale of a note or cash flow, such as:
- Equity in property securing the note
- Payment history of payer
- Priority of debt
- Type of property
- Condition of property
- Note terms
- Credit of payer
- Value of the collateral (if any)
- Property location
TWITA! Thank you for your Note Appraisal. Your level of professionalism, responsiveness and knowledge of the industry is truly outstanding.
~ Jacek N.
What is the “Fair Market Value” of my note based upon the definition used by the IRS?
If you own all, or part of a promissory note or a mortgage note, the question you should ask yourself is this, “Is my note properly valued, or is it over-valued?” Over-Valued Notes will cost you needless fees and taxes. Let’s be honest, all note investors want their promissory notes and mortgage notes to be worth as little as permissible for tax purposes, but worth as much as possible for spending purposes.
Rev. Rul. 67-276, 1967-2 CB 321, IRC Sec(s). 2031 says that the fair market value of notes, secured or unsecured, is presumed to be the amount of unpaid principal, plus accrued interest to the date of the gift, unless the donor establishes a lower value. Unless returned at face value, plus accrued interest, it must be shown by satisfactory evidence that the note is worth less than the unpaid amount (because of the interest rate, or date of maturity, or other cause), or that the note is non-collectable in part (by reason of the insolvency of the party or parties liable, or for other cause), and that the property, if any, pledged or mortgaged as security is insufficient to satisfy it.
Armstrong Capital offers consulting regarding the best way to structure the promissory note transaction so that the outcome sought has the highest probability of being accomplished. Confidentially and privacy respected and protected
Can you appraise Self Directed “Checkbook” IRA LLCs, Alternative Assets and Non-Traditional Assets?
Yes! One of the requirements that the administrator of your checkbook IRA account places on you is that you must submit a fair market valuation of assets owned by your IRA annually. A value of each asset within the LLC is required in order to determine the value of the LLC. Real estate asset, promissory notes, private placements, tax certificates, tax deeds, etc. are each specific types of assets and must be appraised by a qualified third party appraiser using the same standards as it would use if it were directly owned by the IRA.
Other assets, such as bank or brokerage accounts should have year end statements proving their value and will not require a third party appraisal.
Who is responsible for providing the third-party appraisal of the checkbook LLC assets?
The IRA account owner is responsible for obtaining the appraisals. The IRA is responsible for paying the appraisers. A short explanation why the appraisals are required: “it’s the law”.
How often is the appraisal reports required? …..Annually
What are some examples of Alternative Assets or Non-Traditional Assets?
- Promissory Notes–Trust Deeds–Mortgages
- Business Notes and Personal Notes
- Limited Liability Companies (LLC)
Internal Revenue Code Section 408(a)(3) TITLE 26, Subtitle A, CHAPTER 1, Subchapter D, PART I, Subpart A. is the controlling IRS Code Section.
How much do Note Appraisals cost?
If you want a professional note appraisal done by an experienced, qualified appraiser of course it will cost something just like if you wanted to get an appraisal on a home or other piece of property. It cannot be done for free. Just as the electrician or the plumber cannot do their jobs for free. But, there are different levels of appraisal reports that used different levels and types information. Based upon the type of appraisal you need, and the amount of detail that you need, there are different prices charged. Just as GM makes the Chevrolet and the Cadillac model cars, and charges accordingly, different models of appraisal reports can be done, and are charged accordingly.
Note Appraisals usually starts at $400 and up depending upon your specific wants and needs. Contact us today and we will give you our preliminary thoughts on your situation; give you a firm price for the services before starting; help you understand what you are to receive and when you are to receive it.
What qualifications should a Note Appraiser have?
Ideally, a person who evaluates notes and cash flows should have some or all of the following qualifications:
- Must be a part of the current marketplace for privately held notes and cashflows
- Should have many years of experience in the discounted cashflow market
- should have a recognized standing in the note and cash flow business
- Must understand all types of notes and their securitizations
- Must be able to clearly backup a value judgement
- Must understand the math of present and future values
- Should have credentials to qualify as an expert witness
- Should be an established writer and speaker in the field
“Thanks Jeff, your appraisal was extremely helpful for the conversion of my IRA! I appreciate your diligence and thoroughness.”
~ Noel S.
Very few people in America have the proper qualifications and experience to appraise notes, Jeff Armstrong is one of them.
What are Jeff’s Qualifications to appraise my Note or Cash Flow?
In addition to the information contained in Jeff’s Biography, he has been involved in real estate , a real estate broker and consultant in the Note Business for more than 25 years. Jeff is President of Armstrong Capital, a real estate firm specializing in Seller Financed Notes, real estate investment brokerage and consulting. An active broker, consultant, investor, author, speaker and educator he is best known for his specialized knowledge of the Note Business. Jeff has been brokering, buying and holding Trust Deed & Mortgage notes and other cash flows from over 45 states since 1991. He has brokered and purchased notes secured by apartment buildings, residential, industrial, commercial & office buildings, raw land, farm land, Mobile Homes with and without land, Business notes and defaulted paper among others. If there is reasonable protective equity, NO note or income stream is too unusual for him to consider. He has provided valuations on real estate notes for clients and other professionals since 1996. Valuation reports (note appraisals) have been prepared on a variety of seller carried real estate notes and private lender loans secured by a variety of different types of real estate. Jeff has also provided valuations on fractional interests in real estate secured notes where more than one payee hold the same note. From time to time Jeff has also been employed as an expert witness on cases related to real estate notes.