40K Profit Deal In Texas

[Jordan Williams]

Hey BP Family!

I just wanted to share with you a quick story of a successful deal we recently closed. I hope this will inspire someone to take the next step into starting to invest in real estate. I know the beginning can be very daunting because we all were new at some point. We have been investing in non-performing mortgages notes for the past two years and although it hasn't been easy to say the least, it definitely has been a rewarding journey not only financially but personal development. I had to acquire skills that allowed me to overcome my reluctancy to do things that challenged my inner element of complacency.  I think growth is probably the most important aspect of the process. Gaining the knowledge and skillset that I previously didn't have which now serves to solve problems that not only pertain to my real estate business but literally in any aspect of my life. Alright, now lets get to the deal!! 

We purchased a first lien non-performing residential note located in San Antonio, Texas. 

UPB was $60,000

FMV $93,000

3bed 1bath 1050 sft

Purchase price $16,000

Expenses $8,000

Sale Price $65,500

Profit $40,000

We made contact with the borrower at first in hopes to come to terms that enabled them to start making monthly payments again. We were able to initiate contact with the borrower (as we know can be difficult) and get them to agree to fill out and send back their financial statement. A few weeks passed and to no avail the financial statement was never received. We contacted the borrower once again and we explained that we needed this document in order to reassess their situation so that we can understand how we could help them stay in their home. The story they said was they never received the mail and that its possible that their neighbour stole their mail. We then sent them another statement with a 2 week grace period and again they did not return it. We tried to get in contact again but this time they never accepted our calls or door knocker. Since our loan was non-performing for I think over 3 or 5 years (I cant remember exactly) we immediately send out a notice of default because the loan was nearing the statute of limitations in TX which would only allow us to recuperate a certain amount that was owed instead of the full amount if it wasn't filed in time.We started the foreclosure process and found out that the person who owned the property had passed away. The property went into probate but there wasn't anyone nominated in the will to inherit the property. So it took a bit of time and money to show that the property didn't have any other owner rights but the property then went into auction and sold $65,500. Since Texas has a short foreclosure period it allowed us to recover our money in a very short period of time and make a nice profit. A strange set of events in deed, not something that occurs often but it happens none the less. So that was our first encounter with a probate issue. I will try to post deals once a month. I hope you guys enjoyed the read.

Happy hunting.

Jordan