Note Deal Case Study

I was talking with a fellow note investor the other day about past deals we've completed over lunch. While we both swapped stories of great deals and ones that required a bit more work than expected, I was asked if we send out case studies on the deals we do? I've heard of doing this before, but had never actually taken the time to make one for our each of our deals, and quickly realized now how terrible that is! I need to continue to put our past deals out there for other investors and interested lenders to see what we've done, how we're doing it, and the real ROI's were getting on these deals.

So without further adieu, here is our first case study (I say first because there will be many more to come). This was completed with 2 joint venture partners, and worked out completely by us (Dennis Smith and Liz Brumer) owners of Seasoned Funding, LLC and Note Investing Club.com.

We purchased the note from a fund and began the workout right away. What you don't see in the case summary is how challenging it was to find the borrower initially. She was living in Georgia but had "relatives" living in the property. Initially, they refused to give us the number, but then realized who we were and what we were trying to do and happily gave us the number to the home she was living in Georgia.

As you saw in the case study, the borrower had a judgement with a credit card company. This took quiet a while to resolve because it required an document signed by the borrower authorizing us to negotiate with the company. When we requested the letter from the borrower, she got scared and worried we were doing some sort of harm and went dark on us for an entire month. Finally, after numerous letters, calls, and pleas with her grandson - she refused to answer the phone, we helped he realize we were there to help and pay off the judgement, we just needed her consent.

It then took another month to receive the release of judgement from the credit card company and get it publicly filed so we had clear title to receive the DIL. This set us back about two and a half months into the work out. All in all it took about 6 months to successfully get the Deed In Lieu from the borrower and have it publicly recorded. From there we did repairs/minor renovations, and got the property on the market. While we got an offer on day 3 of being listed, it was FHA which required an appraisal that put the property $10,000 under what the buyer offered it for! We we're super bummed about having to lower the price, but still were happy with our ROI.

There were some issues with title when closing, apparently the legal description had been incorrectly recorded for multiple sales and no one had caught it until now. This took another month to rectify which pushed closing back! Talk about frustrating! This deal definitely took longer than expected at 10 months but that's exactly why you always over estimate timeline, costs, and potential issues that way you over deliver in both the time and results to your partners or lenders. All parties involved were very happy with the outcomes and results and are looking forward to doing more deals!