Question on 2nd note investing

[Chris T.]

Newbie here in regards to 2nd lien notes. This came across my email and perk my interest. 

Property is in CA

FMW: $430K

Senior Lien UPB: $282,000. Current.

2nd Lien UPB: $78K

2nd Lien mortgage payment: $599.75

No BK history, 2nd lien payments remaining 364. Loan was modified in 2017 with a $4K reinstatement. 

Owner occupied.

Minimum bid $56K.

Can I get your professional feedback on how to evaluate this deal?

[Ken Hobbick]

@Chris T.  Based on the pricing expectations of seller and a recent loan modification in 2017 of this 2nd note I would expect this to be performing but you would want to verify and review pay history since the modification.    

Just based on payment amount and remaining payments this would provide a 12% yield per year for next 30 years or until the borrower refinances or moves which would increase the ROI as the 78K UPB would be paid off.