Following is an email I received from a Cash Flow Depot Member…(the names and locations have been withheld)
What would you do? Post ideas and I’ll pass them on. I've also sent this brain twister out to my big mailing list and I'll report back what the best ideas were so we can all learn.
Here’s the situation:
I am wondering if you can give me your opinion and pointers on a deal I have in front of me?? I am learning how to purchase non-performing loans from lenders and have my first set of loans in front of me. One of the notes is a 1st position $195,000 note. The guy at the bank said they'd take "almost anything" for it b/c of the following:
1. It is a 72 space park in ____
2. Apparently there were only about 20 homes in the park and 1/2 of them have moved out
3. It is in foreclosure and in disrepair
4. It is on city water and sewer but not individually metered (although the meters are there and need to be installed)
5. The previous owner purchased it in 2007 and just let the park go to disrepair
6. There are about $18,000 in unpaid property taxes
7. There is a 2nd mortgage of about $300,000 (which is an owner carry back on the sale)
8. There is a 3rd mortgage for about $25,000
9. The owner is threatening bankruptcy
10. The fair market value is questionable b/c of the decreased income but was purchased for $665,000 in 2007.
Because there is not equity - we could probably get it removed from the B/R stay if the owner does file bankruptcy. Then we could let it go to the sale and make money on the spread or negotiate with the 2nd and 3rd lien holders - pay the back taxes - and start rehabbing the park and bringing in cheap used mobiles.
Anyway, I am new at this and wondered if you think this is a good idea or not. Also, what would you suggest I offer the lender on the $195,000 1st lien?
Hope you are doing well. Thank you for any thoughts you may have on this deal.
Regards,
______________
What would you do? Post ideas and I’ll pass them on. I've also sent this brain twister out to my big mailing list and I'll report back what the best ideas were so we can all learn.
Here’s the situation:
I am wondering if you can give me your opinion and pointers on a deal I have in front of me?? I am learning how to purchase non-performing loans from lenders and have my first set of loans in front of me. One of the notes is a 1st position $195,000 note. The guy at the bank said they'd take "almost anything" for it b/c of the following:
1. It is a 72 space park in ____
2. Apparently there were only about 20 homes in the park and 1/2 of them have moved out
3. It is in foreclosure and in disrepair
4. It is on city water and sewer but not individually metered (although the meters are there and need to be installed)
5. The previous owner purchased it in 2007 and just let the park go to disrepair
6. There are about $18,000 in unpaid property taxes
7. There is a 2nd mortgage of about $300,000 (which is an owner carry back on the sale)
8. There is a 3rd mortgage for about $25,000
9. The owner is threatening bankruptcy
10. The fair market value is questionable b/c of the decreased income but was purchased for $665,000 in 2007.
Because there is not equity - we could probably get it removed from the B/R stay if the owner does file bankruptcy. Then we could let it go to the sale and make money on the spread or negotiate with the 2nd and 3rd lien holders - pay the back taxes - and start rehabbing the park and bringing in cheap used mobiles.
Anyway, I am new at this and wondered if you think this is a good idea or not. Also, what would you suggest I offer the lender on the $195,000 1st lien?
Hope you are doing well. Thank you for any thoughts you may have on this deal.
Regards,
______________
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