ADVANCE AT 21.5% IRR FROM HITS BY FLO RIDA AND MORE



TERM: Estimated 5 years

CATALOG: This is the writer's share of hits from Flo Rida “Low” and “Sugar” as well as other hits like “Walk It Talk It” from Migos ft. Drake

RIGHTS INCLUDED: 100% OF THE WRITERS SHARE PAID BY BMI

TYPE OF ASSETS: ADVANCE OF WRITERS SHARE ROYALTIES

LAST 12 MONTHS REVENUE: $44,526 PAID QUARTERLY

ESTIMATED TIMEFRAME TO PAYBACK: 5 YEARS

LOCKED IN IRR: 21.5%*

TOTAL ESTIMATED PAYBACK: $220,000

INITIAL AUCTION PRICE: $137,084

PROJECTED PROFIT: $82,915

HOW THE ADVANCE WORKS:

Advances look similar to a loan, although it is not a loan because we are advancing them on future royalties, so we call it an advance. It has the same concept as a loan, there is a term, an interest rate, although we use IRR, and payments made during the term. The main difference though is that payments each quarter can be variable because we don’t know what the royalties will be in the future. So we do our best to create a forecast and then model the IRR based on that forecast of royalty inflows.


For this catalog, we have forecasted out the projected payments over 5 years and applied a 21.5% IRR on that projected income which equates to the current bid price of $137,084. Royalties are paid quarterly by BMI and the total payback is $220,000 over the 5 year period.

To ensure a 21.5% IRR, any principal, not paid back in 5 years will incur a 2.7% interest rate per month added to the principal until t