Sounds like you have a good one. I imagine the original note had an assignment of rents and when the owner had to reduce rents or had a vacancy, the bank exercised the assignment and the bank later sold the note to a note buyer, most likely for a discount. The FEDs will make them write the loan down if it is not perorming to their level. Many times it is substantial. To give you an idea, we recently purchased a church note for less than $300,000 with a face value of $425,000 because the bank had written down to $270,000 so they then made a profit. Borrower had never had a late payment, but the examiner did not like the way they made their income - Bingo rather than the normal giving of the members. Makes no sense.
Contact whoever holds the note and tell them that you are interested in buying the building. You most likely know the original owner and you can contact him about buying subject to the mortgage. There is no "Due on Sale Jail" and then you can negotiate with the note holder directly. You may be able to bring it current and continue on or negotiate a short payoff. If you occupy over 50% of the building, you may qualify for an SBA loan - 10% down and 25 year term. I am sure that you have medical equipment that could be refinanced to help out with equity if needed.
If you can gather the cash to buy at a discount, make a lower offer to the note holder. Contrary to popular belief, they do not want to own your building. They do not want to foreclose - it is expensive and time consuming, and they can't manage the property.
Good luck.
