Beginner Note Buyer Example

[Michael Dunham]

I'm looking to get into investing in non performing notes (which would be my first real estate investment) and am completely floored by what is going on and was wondering if someone could give me a walk through of what I should be looking for in a specific example?

I found a NPN where the original balance was only 11,400. The principle balance is 11, 194 which means they decided to pay 200 bucks and just couldn't pay anymore I guess? They're on their second mortgage. The minimum they're asking is $2,300 (21% of the UPB) The estimated market value of the house is $77,000...

So i guess my question is, what am I missing here?  This is clearly to good to be true, right? I could just buy the note, foreclose, and re sell the property for a huge profit?

Go easy on me, I know i have no clue what I am talking about :-)