Pricing NPN that's past maturity date

[Sean Cole]

First, and maybe most importantly, I'm just getting my education started in the NPN space. With a background in finance, I'm comfortable doing a NPV to price an income stream.

I'm looking at a couple of NPNs right now that are balloon notes, 1 of which has a maturity date in 2017 and the other matured in 2015.  I haven't run an O&E yet to find out if there are junior liens, but I'm most curious about figuring out the appropriate pricing for a past due NPN.  Are you really just looking at the underlying collateral and subtracting your expected foreclosure costs and hassle factor?

Our wholesaling business is successful enough that we have the capital to see if we can buy a few one-offs and be in control of the disposition of the asset.  Perhaps it narrows the pool too far, but I'm initially looking at NPN where we can be all in for less than what I'd be willing to pay for the house in a wholesaling situation.