How is a real estate note appraised?

It's a two fold process. The first part is to evaluate the risk associated with the note.

This is accomplished by collecting a variety of data about the note, ie. property type, property location, buyer's equity, credit and payment history as well as the interest rate, payment amount and term of the note.

The second part is applying an investor yield requirement associated with the level of risk in the "subject" note.