Monthly Mortgage Cashflows Without Tenants
How First‑Out Partials Work (Explained Like You’re 7)
Own the payments, not the property.
Buy 24–36 months of payments on performing, seller‑financed first‑lien mortgages. Licensed servicer collects and pays you.
Escrow closing. Recorded collateral.
Early‑payoff makes-whole. One investor per deal.
Overview:
Imagine receiving rent‑like cashflow each month—without buying a house or fixing a toilet. With Obsidian Prive, you purchase a “strip” of payments (usually 24 or 36 months) from a performing, seller‑financed first‑lien note. A licensed servicer collects from the borrower and remits to you.
We close via escrow, record your collateral assignment, and attach make‑whole protection so early payoffs don’t hurt your economics. When your strip ends, all payments flip back to the original note holder.
The Lego Block Analogy (kid‑easy)
The loan’s payments are Lego blocks in a long line.
You buy the next 24–36 blocks. Each month, one clicks into your hand.
After your blocks run out, the rest go back to the seller.
If someone buys the whole Lego set early (borrower pays off), your blocks get paid out first.
What You Actually Buy (the 4 documents)
- Partial Assignment of Promissory Note: Your right to the next X monthly P&I payments.
- Collateral Assignment of Mortgage/Deed of Trust: Recorded in county records to secure your interest.
- Servicing Instruction Letter: Instructs the licensed servicer to pay you for X months, then revert to the original terms.
- Make‑Whole (UIB) Waterfall: If there’s an early payoff, your remaining balance (UIB) is paid first.
Target Returns (not guaranteed)
24–36 month strips: many investors target ~14–15% net (after ~$15–$25/mo servicing).
48-60 months (By Request Only): typically structured at ~13.5% net.
Final pricing varies by LTV, state, pay history, documentation quality, and servicing costs.
Simple Examples (so you can feel it)
Example A (smaller payment)
Payment (P&I): $1,200
Servicing: $20 → Net remittance ≈ $1,180
24 months: Investor check size typically ≈ $24.3k–$24.7k (at ~14–15% target net)
36 months: ≈ $34.0k–$34.6k (at ~14–15% target net)
Example B (larger payment)
Payment (P&I): $10,000
Servicing: $20 → Net remittance ≈ $9,980
24 months: ≈ $205.6k–$209.9k (at ~14–15% target net)
36 months: ≈ $287.9k–$296.1k (at ~14–15% target net)
Early Payoff Protection (make‑whole, first‑out)
We pre‑compute your Unpaid Investment Balance (UIB) at your contract yield.
If the borrower sells/refinances early, the servicer first pays your UIB; the rest goes to the seller.
Translation: Early payoff usually shortens your hold while preserving (often improving) IRR.
What Could Go Wrong (and how we mitigate)
Payment interruption/default
We buy only performers (6–24 months seasoning preferred), verify LTV and taxes/insurance, and use licensed servicers. You also have step‑in rights, which pay you first up to your UIB + approved costs.
Doc defects (missing allonge/assignments)
We verify the original note, endorsement chain, recorded mortgage/assignments; cure or pass before funding.
Title/tax/HOA surprises
O&E/title check; Tax/HOA status; Florida adds municipal lien search (utilities, code, permits). Cure, escrow holdbacks, or price adjustments.
Wrap risk (underlying senior loan)
Only proceed if the servicer escrows and pays the senior first; otherwise, we pass.
Liquidity
No public exchange for partials. Plan to hold to term. We may help place a resale—no guarantees.
Your Protections (non‑negotiable)
- Funds flow: You wire to a licensed escrow/title. We never custody investor funds.
- Recorded collateral: Collateral assignment recorded before/at funding.
- Licensed servicing: Hello/goodbye letters; monthly remits; escrow/tax/insurance handling.
- Make‑whole (UIB) first‑out: Attached schedule; payoff waterfall baked into docs.
- Step‑in rights: Workout proceeds pay you first up to your UIB + approved costs.
Diligence We Provide (per file)
- Note + Mortgage/Deed of Trust; Assignment/Allonge chain
- Pay history and seasoning summary
- O&E/title snapshot; tax/HOA status; (FL: municipal liens)
- Property value (BPO/AVM/photos)
- State/legal notes (foreclosure type, timelines)
- Drafts: Partial assignment, Collateral assignment, Servicing instruction letter, UIB schedule, Closing calendar and Checklist
Your Onboarding (10 minutes)
Step 1: Buy‑box form (states, check size, target net yield, 24/36 preference, close speed).
Step 2: Proof of funds range.
Step 3: 10‑minute call to confirm your box and servicing preferences.
Step 4: We send 1–2 live files that fit you (box‑of‑one). You pass or commit quickly.
Closing Timeline (typical 10–15 business days)
Day 0–2:
- Indicative offer;
- NDA;
- Open escrow.
Day 2–7:
- Title/O&E;
- Doc/collateral verification;
- Finalize UIB schedule.
- Servicer “hello/goodbye” prep.
Day 7–10:
- Originals to escrow under bailee;
- Wires verified by phone.
Day 10–15:
- Record collateral assignment;
- You fund escrow.
- Escrow disburses;
- Servicer begins remits.
Tiny Case Study (illustrative)
You fund $34,300 for a 36‑month strip on a $1,200 P&I note (net ~$1,180/month).
Servicer remits ~$1,180 for 36 months (net of $20 fee).
Target net IRR: ~14–15% (not guaranteed).
If the payoff occurs in month 18, your UIB is paid first; IRR often improves while the term shortens.
Suitability (who this is for)
- Investors who want monthly USD cashflows secured by real estate—without tenants.
- Comfortable with 2–3 year holds (24/36 months) and documented processes (escrow + servicing).
- US and non‑US investors (W‑8BEN/E supported; OFAC/KYC required).
FAQs
Do I need a credit check?
No. You’re buying an asset (a payment stream); you’re not borrowing.
Who holds my money?
Licensed escrow/title. We never touch investor funds.
What if the borrower prepays?
Your UIB (make‑whole) is paid first; the remainder goes to the seller.
Can I invest from anywhere in the world?
Yes. We support international investors (W‑8BEN/E). Funds wire to escrow; servicer remits monthly.
Liquidity?
Plan to hold to term. Secondary placements may be possible case‑by‑case basis, not guaranteed.
Can I use a self‑directed IRA/LLC?
Often yes—subject to your custodian’s rules and timelines.
For the math‑curious (optional)
Net remittance (A) = P&I − servicing
Price to target net yield (y): =PV(y/12, N, −A, 0)
UIB at payoff month t: =PV(y/12, N − t, −A, 0)
Why Obsidian Prive
- We specialize in 24–36 month first‑out partials (the sweetest mix of yield and duration).
- Box‑of‑one curation: you only see deals that fit your buy box.
- Compliance‑first: escrow, recorded collateral, licensed servicer, GLBA‑safe data rooms.
Join the Private List
Tell us your states, check size, and target net yield.
We’ll send 1–2 live files that fit you this week.
Now, click HERE to get your FREE Guide to First-Out Partials to your email or SUBMIT BUY BOX