All Forum Posts by: Alex Morstadt

Yes - when you buy a note, you will need to record the Assignment of Mortgage with the County Recorder's Office. 

That is a very public space, where your details would be shown on any title searches conducted on the property. 

Yes - you can - sell a partial or get a collateral assignment loan from someone. 

Be careful with not paying off the first mortgage, in VA they can FC on the property in 60 days with the due on sale clause.

Ali and Richard did a great job explaining the system!

I agree with you - those who are established in the industry and moving along well can find better opportunities with higher UPB notes - My point is for those starting out, with limited capital and limited experience, might find starting out with a small note could allow them to work through a deal without a high outlay of funds.

And in most cases legal fees can be collected from the borrower. So if you FC costs $5,000 - you'll typically have that figured into your sale price. 

Like many investors, we started with 1 starter note. Paid ~15K for a performing 2nd that put out exactly 12% after servicing fees - It has paid every month for the past 4 years. 

My wife saw these returns and got interested in the concept of notes - fast forward, she has taken over the business and we've grown our portfolio significantly.

It starts with one.

In this same vein, we are probably going to sell three small UPB notes in the next couple of weeks, probably through an exchange.

Is there a general interest in "starter" loans?

Quick Question for Philly County Tax Sale Guru's

I have a friend who owns a 2nd Mortgage on a property going to the City of Philadelphia Tax Sale next week. The first is quite low, so if it does end up selling, he would make money at a low percentage of FMV.

My question is for folks who go to these sales what do properties typically go for at this sale? I dont know Philly, but its in north Philly, and it doesnt look like a great neighborhood - still the FMV is $100-120K.

The crux of the question is, should he go and pay the taxes... If I owned the note, I would want it to sell for $50k at the sale and walk away.  Is anything like that realistic?

Thank you!

 I agree 

I would figure out what was the very best  reinstatement for me (re not foreclosure) and present that as an option to circumvent foreclosure. And certainly check with your attorney (make sure they're on the mediation call too) before to ensure its legal. 

If its performing, one would consider it. if its not, you'd be paying too much.

Regardless, you've provided a small fraction of what we would need to evaluate the note for purchase. Specifically, the loan mod in 2017 is interesting. Would want to know what was forgiven to get that Mod.

Because 30%+ over 30 years is pretty good too. Seconds are by nature second position in Foreclosure. Its best to buy 2nds correctly!