Non Performing Notes
I am looking at purchasing mortgage notes in default in Florida, (real estate investor wanting to get into note buying).
From your experience, can you give me an idea of how deep of a discount to expect? 30, 40, 50% ?
The notes I am going to target are 6-12 months in default and have no chance of being redeemed. Sort of a back door to foreclosures.
Can you recommend a source to learn more about this area?
Thanks for any advice you can offer,
Florida stoped redemption some time ago but it does help if you can hand pick the ones that wont be www.reinstated.I live in Florida and have purchased many notes in default from lenders, it pretty much gets down to buying a lawsuit. Many ways to profit and many to take a loss. find a tough attorney with heavy foreclosure experience let him state his price to take you through certificate of title, then offer him performance rewards, this is very, very helpful as every day eats into your yield. , You will need this guy, treat him well.
And not all delinquent notes are equal...I've seen some that are pure trash, because of some problem in the sale or other very evident defense the non-payor has, or the poor value in the RE, etc....but others that are pure gold.
One has to examine such notes very carefully to see if they're worth pursuing.
I'm in the process of buying one at par, right now, because I have inside knowledge that a big 2d will be eliminated by the scheduled foreclosure...that I'LL continue to prosecute and close in order to kill that 2d.
Hi John,
For a newbie who sees a similar opportunity (buy the first at par, proceed with foreclosure)...
Can you offer any ideas on how to finance the assignment? I fear it must be all cash, no HML, no mortgage.
What does PAR mean?
[addsig]
Disclosure: I have no personal experience with buying nonperforming notes. I'd like to do that ,but haven't made any effort in that regard -much to my chagrin nobody has knocked on my door with one for sale. I'd like to know the resources available. I'm referring only to commercial notes.
I know that I'm not interested on buying the 1st mtg at Par-just to wipe out the 2nd mtg. You're not in any better position than anyone else who attends the auction. If there's equity there, there will bidders. Granted you will recover your costs, but I don't see much of a benefit. Now if you buy the first at a discount or buy the first at par and get a significant discount on the 2nd-that's a different story. Elucidate me.
par means full face value of the note as far as i know.
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"The notes I am going to target are 6-12 months in default and have no chance of being redeemed. Sort of a back door to foreclosures."
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Actualy, what you are tring to do is called "shooting a seating duck"! The only better one I know is buying only notes with larg second that I can short at 90% 10 days before the auction. Good luck. In some states, buying 1sts when the property is in foreclosure ( for a sole purpose to accuire property's equity) may be considerd illegal. CA for example.
Any additon by Fam con Lucius? [ Edited by EUREO on Date 01/16/2004 ]
http://www.thecreativeinvestor.com/modules.php?op=modload&name=Forum&file=faq#rules[ Edited by JohnLocke on Date 04/08/2004 ]