How would you structure this?

[Steve K]

I'm thinking about buying a non performing note for a small multifamily property. Property isn't in an area where I want to manage it, nor would it be practical as it's about three hours away from me.

One of my exit strategies is to simply offer the borrower the ability to make the note performing again. Anyone have experience doing this?

To use round numbers lets say the property is worth $100k and i'm buying the note at $50k. I'm thinking reduce the unpaid balance and restructure the loan to be $90k at 8% interest only with a four year balloon payment. This should generate approx $28k in interest payments and $40k in value of the note, right?

What am I missing here?

Lawyer tells me we can paper things up in the event he defaults again I wont be looking at much of a foreclosure process.