Someone Wants To Sell Me A Note

[John Thedford]

Someone wants to sell me a note. They are asking PAR.

Thoughts?\

Note is for $62,500 for one year, 12% interest only.
Here is what they stated:

Good afternoon John,

>>
>>
>>
>> The buyer came in with $29,408.61 and has put on a new roof since buying
>> the property in November 2017. Can you please let me know the name you
>> want to use, personal or corporate, so I can prepare and endorsement and
>> assignment of mortgage.
>>

[James C.]

John,

I know you asked Jay, but I'll chime in as well.

The fact that its been assigned before isn't a problem. You need to make sure that your chain of title is good. Consider using your title attorney to check it. Especially look at any allonges. 

Also insist on original wet signatures on docs, don't rely on a lost note affidavit. If they can only produce a LNA, discount it heavily and plan on doing completely new docs  (modification or new note). The courts have been fussy about LNA's, and in some cases have wiped out the lien.

Make sure that your taxes and other potential liens are known or paid. Discount for any outstanding liens. 

You should get a payment history as well. For this note, it should be from origination.  Again, if it's current,  great, if not it's non-performing and should be priced as such. 

Anything you would want as an HML guy, should be what you get when you buy a note.

Personally, I like my performing notes more in the 18% range, but if this is a particularly clean, easy, low LTV note 12% ain't bad. The balance is a bit low, but given the low hurdle rate of capital today, you can probably make some money on it.

Hope that helps.

Good luck, 

Jim