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Updated almost 8 years ago on . Most recent reply
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Non Performing Note Drawbacks
Hello Investors,
I'm new and looking into Note investing. I don't have much cash (like $500-$700 in the bank) but need to get started soon to help pay down debt. Most of my extra cash is being spent on debt. I found a note but really unsure about it, and I'd like experienced note investors' opinions on this. Also know I have about $5000-$7000 available on CC if absolutely needed.
NPN 1st position
DQ over 10 years with matching DQ taxes (found on county website)
Home Value $39,900 / Note $60,900 / Price $600
DQ Taxes $23,000 as of 2015
I seriously doubt a 10 year DQ note can made to perform again with the same homeowner. They've been living for free for 10 years! I also know that either the county is going to foreclose or someone has 1 or several tax liens on this property.
I figure my options could be this (if it even makes sense)
1. Foreclose and get a renter in there for $600/mo, initial investment recouped in 46 mos assuming $4000 to foreclose, $23,000 in taxes and $600 purchase price.
2. Foreclose, get taxes UTD then just sell for $35,000 - profit of approx $7400 (if it's even possible)
3. Foreclose, get taxes UTD then seller finance about $40,000 @ 7% for 15 years yields $360/mo with $5,000 down
Best case scenario, the current owner resumes payments around $600/mo after a refi and lump sum for arrears and those taxes!
I welcome everyone's information on this. Deal, or no deal?
Most Popular Reply
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Of course just after posting I saw that the county foreclosed on the property for the taxes. I doubt the note holder has any rights now.