Can I wholesale a non performing note?

5 Replies

A lady in another state owns a non-performing note in my city/state. She contacted me to sale it, the ARV is 114K, unable to get in the house to see what the rehab would be, she is selling the note for 53K to include money for foreclosure process. I have never done a non-performing note deal. I am wondering can this be a wholesale deal?

Hello Shan, 
Yes, notes can be wholesale-d, but, as with anything in this business, it will always depend on the numbers. 

Without knowing the details, it looks like you're getting it at 46% of ARV. As a wholesaler, that looks pretty decent, but as a note investor, you will need more information:
* Is the property vacant/owner-occupied/tenant-occupied?
* Is she selling you the note in 1st or 2nd position? Are there other notes/liens on the property?
*Are there any overdue taxes?
*Is the borrower in bankruptcy?
*Does the borrower want to keep the house or have they already walked away from it? How many payments have they missed? How much are the monthly payments (Principle and Interest)?
*What is the unpaid balance of the note? At what percentage?

Having this type of information gives you a better feel for the situation, as well as ammo to plan your exit strategies. As a wholesaler, you really only have one option - sell the note and collect an assignment fee. As a note buyer, there are other, more profitable, options to consider. Talk to her and see if she can answer some of those questions for you, then you will be able to determine the next step. Hope this helps and good luck to you Shan!

JC Gauthier
First Step Partners

@Shan Keter White give me a call. I can walk you through the process and make it profitable for you, without having to get a loan to acquire the property. You would need to have the funds to do the rehab still. PM me if you would like to get on the phone and talk about the mechanics.

The balance on the note can be more important than ARV....if the balance owed is $60k, that's all you get at the auction if s third party buys it.

@Zechariah Crosby Yes, you can wholesale a note, but if you aren't familiar with the "Notes" then you will be asked a lot of questions that you won't know how to answer, and if you do find a legitimate buyer, you may lose their interest rather quickly because they won't want to waste time talking to a middleman. I would probably try to negotiate a referral fee and put them in contact with the seller so they can get the information they need and you get paid if they end up buying the note. 

Levi

P.S. Sorry for the slow reply.