Well, back on the road again.....
Nick, there isn't time or space in a forum to pin a value on your example.
Dealing with a note holder, might be an investor, but a holder from a seller financed note is much different than dealing with a broker.
I do the financial due diligence, audit and title/
I then look at collateral
I come to an agreement to purchase, on various levels, just buy it, to being subject to items
A sub-to item will be a letter to the borrower telling them the loan is being sold and the new payment address two months later (you may be required 90 days notice) with my phone number.
Payments on a performing note go to the old holder during that notice period and are fully discounted.
Usually, the borrower calls me, (I give a statement for the old holder to reply to when they get called, as they will) Unlike dealing with notes from brokers with disclosures and non-disclosures the seller is under these restrictions as to our agreement.
When I talk to them I explain I'm buying/bought the note. I ask them if they would like to shave off X dollars and refinance on better terms, the answer is mostly, like always, yes.
I pre qualify on the phone, I explain they will need to make application, ask about any credit issues and make an appointment to see the property or send someone to look.
So far I may have 3 days in it to the point of determining if they can qualify as well as the property. Maybe 3 real hours.
Then to roads, buy setting up settlement and getting those docs ready to the extent an assignment is made or I could do less and just use the assignment to use prior to settlement.
I get with the borrower and begin the refi, usually 4 weeks conventionally or 30 days.
Loan settlement on the refi is set.
Prior to closing I file my assignment option or note purchase docs and give that to my closer, giving them the payoff.
Now, I can buy and wait for my refi or I can tell the note seller that I'll see him an hour prior to the refi for the note purchase settlement.
I close from either direction I going have a refi commitment.
I do my thing with the note seller, then my new borrower refis,
Does this look like the old double closing (he he he) yes, it is!
If I fronted money I'm paid back in an hour knowing funds are there.
I can also use the payoff funds to pay the note seller.
Along the way through the process of those subject to items, I can determine from due diligence what I might do with the deal. I can buy and hold, I can refinance conventionally, refi with private lenders, if the buyer is in the mood to walk away I can take a DIL, if the seller wants to sell the place I might partner to make repairs, advance more to get a sale accomplished within a time line. Seldom would I buy for the honor of foreclosing and messing with the dirt.
I have had brokers who I have worked with explaining what I was doing and required contact with the borrower, they were fine with it (mostly because I was a lender and knew the compliance issues of contacting borrowers and could back up what I screwed up) today I doubt any broker on the institutional side gives all the information much less consent to contact their borrower. The brokers (and banks) would also have a borrower come in as we could all meet. I'm solving their problem.
The best deals are discounts and paying the seller with the refi money, obviously.
There's the step by step, basically, what I said to whom and when and the docs used, well..... you'll have to wait for the BP book on that I guess, ask Brandon. :)
Not even mentioning quality swaps, trades, allocations to partners, how to find motivated note holders/sellers, servicing or collection guarantees, buying as a servicer while using a sub servicer, "wholesaling" the REO or cash for keys options and I'm not getting into modifications as that has endless possibilities.
Now, back to the mundane..... conventional meaty stuff.