It’s all about positioning yourself for long-term gains, and with your current knowledge and tools, you’re in a great spot to make that happen!

Hello colleagues,The fire Marshall recently conducted a review of an 8 unit, 3 storied old building in Palo Alto, CA  that I manage.He has specifically called out for several corrections.

Hello @Michael Dallas,To verify the seller’s information, ensure you request these essential documents:Rent Roll (to confirm rental income and occupancy)Lease Agreements (to review tenant terms)Financial Statements (past 1-2 years, including income and expenses)Property Tax StatementsUtility Bills (if applicable)Maintenance Records and recent CAPEX reportsInsurance Policy DetailsInspection Reports (any recent or previous reports)These will help you confirm the property’s income, expenses, and condition.

Is your income in a place that you could fund that for awhile until rents catch up and make it positive? 

If you did not and it’s unsecured debt you could be out of luck on some or all of the money as depending on his situation unsecured creditors in a bk may receive pennies on the dollar depending on what he can afford and if converted to a ch 7 you would get wiped out.Even in 2nd position he could argue the property is underwater and wipe out your lien.

I start off all my rentals as STR to build up reviews and then covert them to midterm.

Instead of extensive renovations, we focused on strategic market positioning to enhance the property's appeal.

Positive and negative forces will cancel each other out to some extent. 

I have been through the BK route more than a few times in 40 years of HML ing.. and as Don states it can be just crazy what happens what the debtor will do what the BK trustee will do what the judge will do.. that all said if your position in the note is discounted enough probably still worth it. but in my mind to pay 90% and if there is not SIGNIFICANT upside I personally would not do it unless you have a repositioning play or something that no one else sees. 

That's interesting @Adam Windham as one of our portfolio lenders also uses my projections based on market reviews.