Closed on Non-Performing Contract for Deed!

[Paul Riley]

Closed on a non-performing Contract for Deed (CFD) recently in Statesville, NC!

Here are the numbers

Property value: $110k+

Balance: $50k

Purchase Price: $30k

With a typical note, you only get paid out on the total balance. With a CFD, since your company is on the deed, you repossess all the equity.

If the borrowers get back on track, it’ll be a 14% yield.

If we have to foreclose, it’ll be a nice spread on the backend 👍🏻

Happy answer questions if anyone has them. Hope it’s helpful!

[Jamie Bateman]

CFDs in NC can be tricky (ask me how I know). You may have to go the court route if you don't have the borrower's/buyer's cooperation to cancel the contract (and that's a lot of equity for them to walk away from). I don't mean to be negative, and that is a lot of equity protection you have. I am just speaking from experience that the legal route in NC can be a long, drawn-out process. 

Is the UPB $50k or is that the total payoff? Recent contact with the borrower? Recent payments?