Would you consider this note to purchase?

[Andy Chu]

The note has an unpaid balance of 60k and the seller is selling the note at ~ 25k. The note is at a 7% rate but with the discount it is closer to 16%. The note was recently modified so that the payments are below what they could rent the same property for so it makes sense for the borrower to continue to making payments. The only thing holding me back is the BPO value is at 20k.

As a note investor would you even consider this note considering, if you had to foreclosure, you have potentially 13k downside?

[Brian Levredge]

The best advice I've ever heard about purchasing notes is to never buy a note on a property you are not prepared to own. Would you knowingly pay 20% more for a property than that property is worth? I wouldn't.

You are also missing valuable details such as the purchase price, down payment, term, etc. If there was very little put down and the note holder has already modified payments once they are basically renting the property and you should be prepared to take the property back.