Note Investing: Like Watching a Jerry Springer Episode Unfold

[Chris Seveney]

In the world of note investing, you never know what you’re going to get. Just when I think I’ve seen it all, a due diligence case like this one lands on my desk. We’re looking at a seven-figure property in Texas, tied to a non-performing loan. Simple enough, right? Think again.

Here’s where it gets interesting: The borrower passed away without a will. Now, two women are vying for the right to be executor of the estate. Why? Because the borrower wasn’t just a property owner but a business owner with millions on the line. The twist? Both claim they were married to the borrower via Texas’s common law marriage rules. Woman #1 was the mother of his two children, though they split five years ago (but during covid she and the two kids were living with him and woman #2...). Woman #2 was his partner for the last three years until his death. Both allege they were his common-law spouse.

I am imagining this playing out like a live Jerry Springer episode, with probate court as the stage and legal claims as the punches. It's a situation where if it was a springer episode each party would have to be separated after the fist fight/hair pulling contest with one getting thrown in the crowd. 

While the circumstances may seem entertaining, the reality is this is not a laughing matter. Delays like this—especially in probate—impact our timelines and profitability. If we buy this loan, we need to have a thorough game plan on how we are going to be resolving this and understanding these dynamics is key to managing expectations and protecting investments.