All Forum Posts by: Ahmad H.

@Chris Seveney The deal hasn't closed yet but note will be in buyer's personal name. I will have to check with my attorney if there's a way to mark it as a commercial vs residential note. 

As you can tell, I am pretty inexperienced with notes, so this might be a silly question: 

Would the foreclosure timeline still be a concern if buyer signs deed in lieu of foreclosure? If not, I wonder why banks don't make borrowers sign that as well to avoid a lengthy and costly foreclosure. I must be missing something.

@Nick Michaels First off, thanks for sharing! It takes guts to do that. 

Man, sucks that this is happening on your first deal. I am sure you've learned a lot and I can almost assure you that the next deal will be easier. My first deal wasn't smooth either (didn't get as ugly as yours though). I had issues with the tenants I inherited as they started testing their new young landlord but I was self-managing so at least got to screen the new tenants (it was a 2-family) and eventually took control of the property by getting rid of the inherited tenants.

The tenant can threaten and say whatever she wants. As long as the landlord-tenant laws in PA allows you to enter with reasonable notice, all you have to do is give her 24 hour notice that you'll be entering and go in to do whatever repairs are needed.
Another option is to get code enforcement involved, especially if she's the one who called them. Tell them she's refusing to let you do the repairs to get the property up to code. One phone call from them explaining how the apartment will not be habitable without those repairs will get her begging you to complete them.

While you should always budget for a PM when underwriting a deal, I think it's good to self-manage at the start to learn the ropes. Not only will you screen tenants better, you will also know the full potential of a property and have a baseline to compare future PMs to. 

Good luck! 

@Kevin Vandenboss Thanks for the tip! I'll check them out.

Makes sense since the borrower can pay off the note the next day, leaving you with a loss if you paid over UPB. I had the same concerns, so I added a prepayment penalty of 10% if note paid off within first year, 9% within 2nd year, ... 6% within 5th year. An important detail I forgot to mention in the my initial post.

Any idea of how much of a discount notes get for being in NY vs let's say FL?

HML 3% points and 12% for fix-n-flips are short-term. Don't you end up with gaps where your money is sitting around waiting for the next deal, lowering your net?

@Logan Hassinger Thanks for the response. How did you come up with the 90%?

@Jay Hinrichs Thanks for a shot of reality. Here I am thinking I could get above 280k for it since it's a high interest note with plenty of equity as a safety cushion. 

Where can I find 1st position notes at 15 or 20% apr? :P Sounds better than buying rentals!

@Dan Wallace Thanks for the perspective. 

This will be a start-up business but the buyer operated something very similar before and was successful. The buyer will be personally guaranteeing the loan. Appraisal is coming up but I don't have any doubts it will appraise for 380k. 

The location is excellent and most of the value is in the land.

@Mark Sewell This is a commercial property, so the owner will not be living there. He will be starting a business.

The deal hasn't closed yet, but assuming the note performs, how much of performing history would be needed before attempting to sell?

Hi All,

I am in the process of selling a property where I will be holding the note for 280k (15yr term, 10%, 5yr balloon).  The property is worth 380k and I am getting 100k down from buyer. 10% return is nice on the 280k but I'd like to have a way to liquidate that note for another purchase if needed.

What would this note be worth? How to go about selling it? 

Hi fellow BPers,

My wife needs help deciding which brokerage to join as a salesperson and become an associate broker. She has been a local real estate investor & Realtor for 5.5 yrs, eligible for broker's license. 

Which brokerage is a member of both ENYR & CIREB and would have the low costs, incl. commission split and fees?

Thank you!