Quote from @Oriah B.:
I am considering to buy this NPN. I have been successful in buying and profiting on notes and am looking to get back into since my REO supply dried up and there's no money in flipping properties right now. I offered the seller 50% of UPB but they want closer to 80k. Seems a bit rich for me, but maybe you guys disagree?
Lien Position: 1st
Non-Performing
Note Type: Mortgage
Legal Status: Foreclosure
Unpaid Principal Balance: $85,408.00
Loan to Value: 54%
Origination Date: Mar 1, 2021
Original Balance: $87,137.00
Total Payoff: $103,006.00
Payments Remaining: 221.58
Interest Rate: 9%
Interest-Only Loan: No
Principal and Interest Payment: $791.76
Escrow/Impounds $0.00
Total Monthly Loan Payment $791.76
Last Payment Received Date: Sep 7, 2022
Maturity Date: Aug 1, 2040
Accrued Late Charge: s$694.38
Approximate Value of Property: 140k/Located in Florida
Hi @Don Konipol. Thanks for your post and providing general information about your opportunity.
I am not providing financial or investment advice below, just an assessment and opinion. However, based on the information provided, there are several factors to consider in determining whether this NPN is a good deal.
For those who are new to real estate investing, the term NPN stands for non-performing note.
In real estate, a non-performing note is a loan that is in default because the borrower has stopped making payments on the loan. This means that the borrower is behind on their payments, and the loan is delinquent. As a result, the note is considered non-performing.
On the other hand, a performing note is a loan where the borrower is making their payments on time and according to the terms of the loan. The loan is current, and the borrower is not in default.
Investors often purchase non-performing notes at a discount, hoping to either work out a new payment plan with the borrower to get them to start making payments again or foreclose on the property to recover their investment. Conversely, performing notes are generally considered less risky, but also offer lower potential returns.
@Don Konipol now that my explanation is out of the way, I can provide my opinion regarding your opportunity.
Firstly, the property has an estimated value of $140,000, and the unpaid principal balance of the note is $85,408, which puts the loan-to-value ratio at 54%. This seems like a reasonable ratio, although you would want to verify the property's value to ensure that it is accurate.
The interest rate of the loan is 9%, which is a decent return, and the loan is not an interest-only loan. The borrower has also made a payment as recently as September 7, 2022, and there are still over 200 payments remaining. This indicates that the borrower may have some intention of repaying the loan.
However, it's non-performing and in foreclosure, and there is an accrued late charge of $694.38. This suggests that there may be some risk involved in this investment.
Ultimately, it's up to you to assess the risk and reward of this investment and determine whether the potential returns outweigh the potential risks.
In summary, I recommend submitting a low enough bid that isn't too discouraging to receive a response. But, it's important not to exceed what you're willing to pay, especially if it doesn't align with your desired return on investment and could result in a loss that is beyond your comfort level.
@Don Konipol Nice to meet you. I hope my perspective has helped.
**What factors do you typically consider when making a bid, such as unpaid principal balance (UPB), total legal payoff, broker price opinion (BPO), or others? I would greatly appreciate hearing your thoughts and learning from those who are more experienced than I am.
