All Forum Posts by: Marco Bario

@Kyle Jones -

@Brad S. is correct. Private money / hard money lenders I know don't lend on owner-occupied property. But you could sell an investor an option to purchase your property, which is accompanied by an option for you to repurchase the option.

You'd have use of the option proceeds knowing that at a later time you could repurchase the investor-held option for a higher price. If you're purchasing investment property, you could purchase said property, stabilize it, and refi to raise proceeds allowing you to repurchase the option. 

If you work with an investor you know and trust (recommended) they could allow you to extend the expiration date of their option for a fee. Otherwise - you risk losing your personal residence. 

@Sandra Helena Holtz Ivarsson -

As has been suggested, the borrower's credit report will tell you who the first lien provider is and if it's current. But only if it's reported to bureaus. 

You mentioned you're just starting out so it's possible you aren't able to pull credit reports yet. The note seller might agree to do it for you. 

The balance reported on the credit report may not include a deferred balance if there is one. You could be in for a big surprise. When the loan mod was agreed to (you mention the 2nd is re-performing), hopefully, the investor who owned the loan at that time required the payor to sign a limited power of attorney (LPOA) granting authorization for the senior lien holder to share information with the junior lien holder. If so - what you want is a payoff statement for a complete picture of the loan balance. I'd also negotiate for the note seller to be sure the payor grants you a LPOA going forward.

@Chris Seveney - Good mention. I hadn't thought of BK implications when the MH title isn't retired. 

Most investors who buy seller-financed notes secured by manufactured homes and land require the MH title to be retired. I bid on one recently where I would have broken that rule in order to get the deal, but had a plan to work with the homeowners to retire the title and therefore increase the value of the note. 

Ultimately the seller felt I was lowballing the price and decided not to sell (yet anyway). But knowing that best case I had additional work to do, and worst case the homeowners didn't play along, I couldn't raise my offer. Maybe I'll throw the mention of BK in there to bring more awareness to the seller of the risk I'd be taking on.

I'll add this - the more I learn about title the more deals I'm able to close. Someday I'll have to share details of the biker club note I'm working on. The title is very messy on that one.

@Tyler Troutman -

356 remaining payments on a 1st at 4% is better than you'll find anywhere for investor or owner-occupied property.

Is $35K the full payoff amount on the non-performing solar panel loan? There may be late fees, interest arrears, and other fees. Can you reinstate that loan? 

Are taxes current? Have you checked title for other liens? 

All numbers you shared above total $136,260. Taking the lower range ARV ($150K) you'll be invested at 90%. This may not be a great flip. Depending on rents, maybe a buy and hold?

@Craig Anderson -

I'm going to give you a very somber warning about balloons. 

Just this week, two property buyers contacted me. Both purchased properties using selling financing. Both have balloon payments coming due. Both experienced loss of income during the pandemic and their credit scores are low. Neither will be able to refinance to pay off the balloon. 

When they closed on their properties of course they couldn't have seen trouble ahead. But life happens. People get sick, income streams come and go, income properties sometimes don't perform as expected, economies rise and fall, interest rates rise and fall, lending tightens and loosens, natural disasters happen... etc... etc...

My point is to do what you can to avoid or lessen the impact of the balloon. If the seller won't let it go, perhaps you could negotiate an option to extend.

@Ivan Aldana -

Someone here may have a recommendation. Which state is the property in?

@Mike Colucci

I recommend education with ongoing support and mentoring included. Names I trust in that arena include:

Tracy Z / Fred Rewey

Chris Seveney

Kimberly Banks Fawcett

Czarina Harris

I’ve been a member of Fred and Tracy’s mentoring group for a couple years and have been investing in notes for almost five years. Their group includes one on one sessions when needed. Just yesterday I sent a deal to Tracy to help me understand a few things I’d never seen before. There’s a steady stream of high level educational content, monthly mastermind sessions, and and huge archive available as well. Even as I become more seasoned in the space, I can’t recommended that level of support enough.

One more thing related to DD - having a knowledgeable attorney review the collateral file is valuable as well. 

Paperstac.com and NotesDirect.com list all types of notes for sale. Both are good places to practice due diligence. As you develop your network, you'll be able to compare findings on those assets with others and learn together. 

For other free resources, I recommend the Note Inc podcast and the great webinars put out by Tracy Z and Fred Rewey.