Making an offer on a PN - due diligence 'clause'?

[Sarah Dawson]

I finally found a PN I would like to make an offer on!  I know that when I offer on a property I can easily not move forward with anything I find with an inspection clause.  Is there something similar in the due diligence period for notes?

[Don Konipol]

@Sarah Dawson

When we have an accepted offer on a performing note we want to verify

1. The payment history

2. The unpaid balance

3. Property taxes and status

4. Any property tax loans

5. Any and all liens and encumbrances

6. The value of the collateral

7. The financial condition of the maker

8. The financial condition of any guarantors

9. The condition of the collateral

10. Title to the property

11. Environmental status

12. Any deficiencies in the promissory note

13. Any deficiencies in the mortgage document or deed of trust

14. Any deficiencies in note closing or property transfer if applicable

15. Any previous defaults

16. Any previous lawsuits

17. Any previous foreclosure filings

We like to get as much of this information as possible up front, however we often make an offer after obtaining only partial information but make the offer contingent upon obtaining specific information we don’t have.

We like to list specifically the information we need to close at the time of the offer so that if the seller is unable or unwilling to provide that information we can decide immediately whether to move forward without that information or terminate the offer.