Updated over 16 years ago on . Most recent reply
help analyzing please (note)
What: Note that was created almost a year ago (10 months or so). One-year balloon with no payments. Due in 2 months. I suspect the note holder is looking to sell since he is afraid the borrower (a relative) won't be able to pay. The noteholder didn't run credit score since he was selling to a close relative.
Property is valued at 90-95k (at today's conservative prices)
Note is for 70k.
Good area, not sure about the condition, but I suspect it needs cosmetics (about 10-15k).
I haven't spoke with the owner about his numbers or expectations, but in order for me to bird-dog this deal, what kind of numbers (purchase price that is) are we talking here?
My thinking is likely scenario is foreclosing on the loan. That is 5k. Fixing it - another 15k. Holding, closing, realtors fees - another 15k. My finder's fee 3k. Gross profit for the investor - at least 20%, that is 20k. Thus I am at around 30k to offer for the note. Does it make sense at all?
What other information is needed to complete the picture?
Thanks in advance.
All help is appreciated.