BiggerPockets

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.

You have the cart before the horse.
When a note is foreclosed upon there is no more note and you own the property.

If an invstor purchases the note for 30k and is not repaid, then he will have to foreclose on the note. Thus you would have to add the 5k foreclosure to the purchase price. We are now up to 35k. Then you fix it up for selling 10-15k. We are up to 50k invested in property. Holding costs, realtors fees add another 15k. Up to 65k now.

Most RE today can be purchased at 50 to 70 ARV which you say is 90k. So the investor would be paying 65k for a property he probably can purchase outright for 45k. That would be a 20K loss to the investor.