Hello all - 

I'm a relative Note greenhorn but not a greenhorn to REI. I've read up and studied enough on notes to be dangerous...ha.

I cant provide every single detail - post will get a bit long, and I may give away the property I'm after as there are plenty of other local investors here.

However there is a house my wife and I would love to get ahold of and make it our personal residence.  Long story short, home built in the mid 70's -- built VERY WELL -- same owner since around 85 or so -- this owner kept cash out refi'ng over the years to supplement their lifestyle - last mortgage they took out was around 2007, then I'm guessing based on conversations with the neighbors stopped paying the mortgage around 2012 or so if I had to guess.  

The mortgage was then transferred/sold by the major/national lender to a sub prime lender -- house has been for sale 2 now going on 3 years I believe.  Home is full of mold and no one has lived in it for 2-3 + years.  It would require a total gut job which I have already roughly bid - major unknown would be truly how bad is the mold? -- story I got was that around 8-10 years ago the homeowner was replacing the roof themselves and a tremendous storm/downpour soaked the inside of the house/all the interior walls and mold started to grow.  My nose never ran and I did not notice it but I could see it in places.  I'd be prepared to strip it to the studs.

So my thought process was that instead of offering the bank $100k less than what is presently being asked for the house, go direct to the bank - see if I could purchase the note at a discount, then go ahead with the foreclosure process myself.  I'm not an expert on KS foreclosures however am not  a stranger to how it works and all the steps.  One of my rehabs involved redeeming a property out of foreclosure.

So if I could purchase the note for 10-20cents on the dollar for what is presently owed, then foreclose - wait out the redemption period, then assign title to myself and begin rehab?

Am I crazy?  Is this doable?  Have I hit all the hi-lights? I pretty sure the sub prime lender does not want to foreclose due to the mold -- they have to be aware of the issue as per my knowledge 2-3 people have had it under contract then backed out last minute when they found out it was inside the walls.  It makes no sense why they've left it on the market this long except for that one simple reason.  

We have enough patience to wait out the foreclosure process -- once the sheriff sale happened the owner would only have 90 days to redeem due to the state statute which determines the length of redemption based on how much principal has been paid off -- the owner would get the min amount of time.