Hypothecation Of Note Portfolio
Hi,
I wanted to find out if anyone can assist with the financing of a note portfolio. It is a commercial note portfolio that is being offer at 55cents of mortgage value price which is about 60% of the appraised value. I was told that the way to do the purchase is that the person would loan against the notes and I would offer the notes as collateral and make money off the spread between the amount I would collect from the loan vs. the debt service.
historic properties are nice, but I have only seen very limited financial incentice to invest in them. If you can put a commercial use on the house you might get tax credits.
Is there a preservation society or local invester that would fund the deal?
Well I just wrote this really long answer to this question and managed to close the window before I submitted so I am going to apologize for the short answer i am about to give.
Have the woman selling the historic house rent it back from you for a year. This makes it an investment property with income and therefore easier to acquire while you still own the current house. Make her mortgage payments 125% of the amount you payment will be and add the years rent to the purchase price.
After you close on the historic house as a rental have the tenant send you a letter saying that due to changes in her circumstances she no longer wants to continue to live in the house
You move into the historic house.
Now you have a couple of choices,
Rent out your current house, continue to make the mortgage payments wait for the market to turn around to the point that a short sale is no longer necessary then either sell or hold.
Refinance the historic house on the basis that it is now your primary residence, take the proceeds use them to pay the shortfall from the sale of the current house and go ahead and close on the current house and pay the note in full.
Short sale the current house and stiff the bank. Since you are in the new house your credit report will have time to recover before you need to borrow again. Whether your conscience will or not is another matter. This may be more difficult because you now have considerable equity in the new house which may make it more difficult to get the bank to accept the short sale.
BTW since you are buying the historic house as an investment under this plan you are going to need to come up with 20% down. If you must borrow this from somebody and then re-pay it with a HELOC on the historic house after it has become your primary residence.
Hope that helps.