Notes always keeps things interesting! (CA - 29 Palms)

[Harrison Silverstein]

Hi all! A bit of an interesting story that I thought I'd share!

I recently acquired a note in 29 Palms, CA for ~90% UPB (About $50,000 mid 2021). This asset is a Lease Option contract that has been Non Performing since 2019. My initial plan is to legally recover the property and sell it wholesale to an investor.

While waiting for assignment creation/ recordings to complete the servicing company & our attorney were contacted by the current occupants to find out that the borrower (technically 'tenant') lives at a different address and for the past few months have been illegally subletting the home to another family! We let the occupants know that they should not have been rented to in the first place and give them the heads up that an eviction was going to be taking place for the original tenant/borrower. 

Some time after that, our servicer suddenly hears from the tenant who has been non communicative for years! (I'm assuming the current occupants decided they didn't need to pay rent to their fake landlord, so that prompted her to finally communicate). Now she claims the occupants are professional squatters, and is requesting assistance from us to evict them! (How the plot thickens!)

Drama aside, this doesn't change our strategy one bit. Regardless of who is what, the easiest procedure moving forward is an eviction of everyone that doesn't belong, so everyone has to go regardless and we're not getting involved in the drama between tenants. They can sort it out after the fact. I just thought this whole tale was amusing! (some good 'tea') 

We're currently in escrow with the cosigner of the LSOP for $175k as a special consideration if they want to keep the home in the family. He was able to get outside financing, so this saves us the trouble of the legal process, win-win! 

Hope you guys found this as amusing as I did. Notes truly are each their own adventure! haha. 

[Chad U.]

Quote from @Harrison Silverstein:

Hi all! A bit of an interesting story that I thought I'd share!

I recently acquired a note in 29 Palms, CA for ~90% UPB (About $50,000 mid 2021). This asset is a Lease Option contract that has been Non Performing since 2019. My initial plan is to legally recover the property and sell it wholesale to an investor.

While waiting for assignment creation/ recordings to complete the servicing company & our attorney were contacted by the current occupants to find out that the borrower (technically 'tenant') lives at a different address and for the past few months have been illegally subletting the home to another family! We let the occupants know that they should not have been rented to in the first place and give them the heads up that an eviction was going to be taking place for the original tenant/borrower. 

Some time after that, our servicer suddenly hears from the tenant who has been non communicative for years! (I'm assuming the current occupants decided they didn't need to pay rent to their fake landlord, so that prompted her to finally communicate). Now she claims the occupants are professional squatters, and is requesting assistance from us to evict them! (How the plot thickens!)

Drama aside, this doesn't change our strategy one bit. Regardless of who is what, the easiest procedure moving forward is an eviction of everyone that doesn't belong, so everyone has to go regardless and we're not getting involved in the drama between tenants. They can sort it out after the fact. I just thought this whole tale was amusing! (some good 'tea') 

We're currently in escrow with the cosigner of the LSOP for $175k as a special consideration if they want to keep the home in the family. He was able to get outside financing, so this saves us the trouble of the legal process, win-win! 

Hope you guys found this as amusing as I did. Notes truly are each their own adventure! haha. 

I've taken back several properties as REOs with inherited tenant/ squatters and not easy to get them out.  However, notes and lease options are completely separate animals and really shouldn't be put in the same bucket.  On a note you cannot readily evict an occupant for non payment, wish it were that easy.