1st reforming note go for about 40% of the unpaid principal

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I have an opportunity to buy a re-performing first note at a 40% discount to principal The note has only 2 payments under a recent loan modification The interest rate is 5% and the principal is about 10% above appraised value The note has been serviced and modified thru a national service company . The effective interest rate is about 10% Assuming all the paperwork is in order what are the risks of making this type of investment vs the rewards