Hi. I'm learning about buying notes and was curious about non-performing notes. If I buy a note where the borrow is willing to do a deed in lieu of foreclosure, what is involved in that process? How do I profit from it? Do I create a new loan repayment plan or go through a process to sell the property?
I came across a note that has $27,000 unpaid balance and selling for $2000. Got me curious why it would be sold for such low amount.
There could be many reasons
1. Is it a 1st position lien
2. Are there taxes or other super liens on the property
3. What is the property worth?
4. What state is the property in ?
My guess would be the property had a low value and also owes a boatload on taxes which you would be responsible to pay
1. It's 1st position lien
2. That's great advice. I've not yet checked on any other liens.
3. So far I've seen online, property value is around $55k but that definitely requires more definite valuation.
4. Property is located in Michigan.
Is the property currently being lived in?
Are you buying the note directly from the bank ?
It's not through a bank but through an online notes trading platform. I've not done any due diligence so don't have much details. I was curious what the buyers do when when they purchase such notes and the borrower wants a deed in lieu.
If the seller notes the borrower wants to do a DIL and only wants $2k that sends up red flags as they could take the DIL and then get an agent to sell it or sell it to an investor.
By the way I am not far from you if you want to get together for coffee sometime let me know
Thanks for the insight on the note. We should definitely meet up.
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