All Forum Posts by: Marc Faulkner

Take him to court and represent yourself because if the home is actually foreclosed on you are a sure winner. You may not get your money right away but you will get a judgement.

No I did not get it. Can you send it to my regular e-mail address? Sorry for the late reply.

KnickKnack101 You are right on the money. If you are looking for notes to buy for cashflow all you need to do is go to a reputable note broker that has been in business for a while and they will be happy to help you find a good note to buy! I have been both buying and selling notes since 1999 and would welcome the chance to work with the investors on this board looking to get into the note business as a buyer.

I agree with Jon that if you do a subject to and keep everything where it is now that you will be stressing out the payer. This will certainly lead to problems for both of you in the future because she simply can't afford the payments on her own. That is why I suggested seeing if the MIL would take a discount on the note. If so you could buy the note at a discount and restructure the note with the payer to make the payments more afordable while at the same time providing a decent return.

Short of getting some serious cooperation from the MIL, another option would be for you to just rent her something you have available or go out and buy something that you can rent or lease option to her that is affordable. The MIL will now be stuck trying to sell or rent the home she gets back on her own.

Why buy the non performing note or what is going to become a non performing note from the MIL at more than the current remaining balance? Is she actually asking you for the original selling price when the balance of the note is less than that? What is the current balance of the note and how can the MIL justify asking for anything more than that? I have to assume the terms on the note are favorable since her son was part of the original deal. Right now she is probably thinking, "oh boy how is this situation going to play out?" I think she would be agreeable to a reasonable discount in order to just cash out now.

I would get a copy of the note from your former tenant study the terms and run an amortization schedule to figure out the current balance. I would then take 70% of this number and assume this is more than a fair number to offer the MIL for the note given the situation and the fact that she gets all cash now instead of dealing with a former DIL. Also remember she is willing to offer terms which means she is most likely a flexable person just trying to make the best of the situation, however, CASH NOW means a lot to folks in this economy and if there is a way to make this situation actually affordable to your former tenant while at the same time being a safe and secure investment for you, then go for it.

If you can't buy the note at a discount from the MIL and restructure the terms of that note in a way that is going to be affordable for your tenant then flip this deal to another cash buyer if possible or run. Get the former tenant into something else.

Lucky you got in under the deadline and that you qualified! In general financing is hard to come by on the mobile home we work with and that is why we like them so much. They are hard for most owners to sell because they need all cash in most cases to payoff underlying loans. Most mobile home buyers do not have cash and there are few banks that will finance homes in parks. This causes a lot of homes to sit on the market for a long time and the longer they sit the better the deal you can make when you buy!
Financing is the name of the game here. You buy low and sell at full market and offer seller financing with low down and reasonable monthly payments. You now have the upper hand on the rest of the sellers in the market because you are offering terms making it easy for the buyer:) You are the bank in these deals...

We are looking for partners in SW Michigan. We mainly work in the Mattawan and Kalamazoo areas and currently have a few homes we own that need total rehabs. These homes can stay on the current lots with no lot rents until you place a buyer/ tennant. You do the rehab and you own 1/2 the first home and whatever the proceeds are. You can sell for cash, terms, lease option. We are creative and flexable. I just happen to have a few to many projects and we are looking for some go getters we can work with. I will help you every step of the way. You do the work and get 1/2 a mobile home free!!! Please contact me if interested.

Welcome to BP Bret. You will find a wealth of information as well as have the ability to ask questions about real estate notes in the "Forums" right here on BiggerPockets. I look forward to networking with you.

The biggest problem I see with this proposed transaction is if the first position mortgage note you are taking over has a due on sale clause which most do. This is rarely done by lenders but can and does happen. If there is no problem with the lender in this regards and they are willing to put that into writing, you would write up the new contract as a wrap or all inclusinve deed of trust. You will want to make sure you are comfortable with the yield spread you can create from the cash flow of the new note and the underlying balance. If structured properly there would even come a time when you could sell the resulting real estate for a lump sum and cash out the first, now puting the wrap in first position, making it more valuable to an investor. You as the note seller would keep any difference in the payoff of the underlying mortgage note and the sale price of the note!!!

Sounds like the mother in law is the one that is in a bad situation here. If the original sales price was $210,000 what is the current balance on the loan? Why would the mother in law want more than what the current loan balance? This is a low grade note and would most likely not be sellable in the secondary mortgage market. With that said you could be the only potential buyer! I wonder if the mother in law is in need of cash and I wonder what type of discount she would actually settle for on the note she is holding. I would find these things out if I was involved in this deal. I would wager that she would actually take 70% of what the current loan balance is assuming the note were to pay off today!!!! I would then restructure the note with your payer to suit your need for a good investment and her need for a roof over her head.

The answer is you will have the seller paid off in 30 years unless the real estate note has a balloon in the contract. If there is a balloon, you would have to find a way to come up with the full payoff on the balloon date. Also you could always pay extra each month and pay down your loan faster.