Other Exit Strategies For NPN (First Lien) Besides Foreclosure?

[Jason Eyerly]

I'm looking at the FCI Exchange, just to give myself a sample of ideas as I look into notes. I can't seem to get my head around it. Another BP member mentioned to me that so far him and a partner have only gone for non-performing 1sts. You can get NP 2nds for about 20%, but what on average are you looking for in 1sts? Is your primary exit strategy to just foreclose and turn it in to a turn key rental or to attempt to get them re-performing? There doesn't seem to be much of a gap in the UPB and what you get it for to allow you room to work with them on reducing payments, balance, etc.

Take these two notes for example:

• FCI Example 1
• FCI Example 2

• Example 1
  • Purchase @ $26,000: 85% UPB
  • UPB = $30,000
  • This is only a $4,000 reduction on what they owe, how could you get this performing again and keep it profitable?
  • ARV @ $75,000
  • Makes more sense to foreclose and give them the choice to jump back on payments or no-go!
• Example 2
  • Purchase @ $11,500: 40% UPB
  • UPB = $28,000
  • ARV @ $9,500
  • Is this just garbage?

    I'm not sure if there's something I'm missing, haven't read up on, a number I'm leaving out, or if I am just too slow to comprehend NP 1sts. 2nds seem much easier to understand when they are current on the first, as far as your options to get them re-performing, foreclose subject to first, etc. Thanks in advance!