All Forum Posts by: Andy Mirza

@Ben Lake I would consider altering your strategy (or making this an additional one) by marketing to those who originated seller financed notes, 18-36 months ago. The idea is that many sellers would not consider discounting their note immediately after a sale but after 18-36 months might be ready to let it go for the lump sum. Just a suggestion :)

The Order for the Assignment of Rents was very thorough and basically allows your receiver to step into the shoes of the landlord. For a landlord/borrower who's collecting rents without paying a mortgage, it's a total buzzkill. There's no longer an incentive to do anything to keep the property, in my opinion, assuming that there's no equity.

In this case, the receiver/property manager went to the property. She made contact with one tenant and discovered that the borrower was fixing up the other vacant unit and was planning to rent it to someone in a few days. Luckily, he was cooperative in dealing with our receiver. I think he knows the game is up.

I have experience with rentals and property management companies. Our receiver was selected by our attorney & asked us for a lot of money to manage the property. I'm not sure if this is a normal thing for receivers but I'm planning to do the research to find out. I don't think that I can change the receiver without making the request through the courts, which involves time and money, since the receiver is specified in the order.

In this situation, the extra money is well worth it to get the property under our control and to deny the borrower a way to fight us.

@Joel Hutchinson Keeping your money working as much as possible is an issue to think about. The best thing would be to look at the different funds and what they offer. Some will allow you to roll over distributions so that you can compound. Others don't. 

Currently, the best way to do that with our funds is to roll over distributions from prior funds to the next open fund. For sure, this has its limitations but we're working on setting up a pref only, open ended fund so that investors can park their money in between our close ended funds.

@Chris Seveney It cost $650.

I think it's totally worth it even though the property management company hasn't started yet. To deny the borrower this cash flow and the incentive to file BK is enough of a victory. The idea of seeing the interior and getting things sorted out with the tenants before the sheriff's sale gives us a big head start on liquidation. And bringing in some rental income would be frosting on the cake. I'll let you know how it goes.

We received our order for the assignment of rents today. Looking through it, I was pretty impressed. It empowers the receiver (a property management company) to basically take over the tenants and the property. It orders the owner/borrower to give everything over to the receiver and not to interfere with their duties.

This borrower has filed numerous bankruptcies to stop foreclosure sales on other rental properties that he's owned. By getting this assignment of rents, we've taken away the main reason for him to file BK to stop our sheriff's sale. (At least that's what I think now; you never know what a BK judge is going to do.)

It also gives us a head start by enabling us to make contact with the tenants & verify the condition of the property ahead of the sheriff's sale. (The sheriff has indicated that they will resume sheriff's sales at the beginning of the year.)

@Joel Hutchinson My company creates and manages funds that invest in non performing notes as well :)

I'd add:

Ask for references for buyers who have bought from them in the past. The best is when you come across references for buyers that you know personally so that you can get a real idea of what the seller is like.

I agree with Chris. Who determines what fair market value is? In my opinion, this is one of those things where you just need to have something reasonable to fill in the blank. Is anybody going to check for accuracy? Probably not. Please don't spend $650 to do this. Use UPB, market value of the property if the loan is underwater, or a percentage of either. Keep it simple, report something, and move on.

@Sean Dougherty Your best chances of success are to track down lenders that are not banks but smaller equity funds or investors. Since you know all of the situations with non performing notes in a certain area, find out who the lender is by tracking down the last assignment of mortgage. If the lender appears to be non institutional, you might get lucky in reaching out, making an offer, and have the note holder accept it.

If it's a big bank or a hedge fund, you're probably out of luck. Those guys put out the loans that they want to sell when they're ready to sell them. If they're not ready or willing to put out the loan for bid for whatever reason, it doesn't matter at all that you want to buy their note even if it's the best deal possible for them.

@Rodger Little We use a vendor to provide a due diligence report but use it to supplement our own investigations. I would be very wary of completely outsourcing DD. No one cares as much about an asset like an owner does.