We have to do a little work here with the surveyor, city, utility modifications, adding driveways , flipping garage doors but if I can do this, it will really optimize the value of the investment but I will have have to have the stars align so will see how it goes!

It usually involves a move out of town and they would like to keep the current home as a rental.I run comps which suggest the optimal rental price is $1600.

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I don't think there is "most likely scenario".Each note has its own history, behavior and performance.All of the scenarios you mentioned can happen and I run into all of them during the years I am investing in notes, and note status can change on daily basis (a borrower that is working, healthy or married today might change status tomorrow).The tip I can give you is that when you are doing due diligence prior of investing, you should take worst case scenarios and check what will be your profit in such scenarios.If you are well protected and have multiply exit strategies, you will be able to earn even in such scenarios, and of course earn much more in more optimal scenarios.I can tell you 3 things about the note you mentioned - - I like it is a medium term note (13.75 years, not the 20 or 30 years note)- The LTV is very good, so you have good protection here- I think I have read somewhere that statistically there is a higher chance that a note that have once been non-performing will become non-performing again in the future (not sure if this is correct).Good luck,Eran

Every time I play with snakes....Thank you for bringing to light the pain (not to mention the thousands and thousands of fees) to optimize ones ROI through equity harvesting, equity-stripping, leveraging your assets or whatever the latest 'sophisticated' way is to grow.  

:)  In an optimal world, we will buy a home where we would like to stay in for the next decade, but with the current prices where they are, I think we'll end up purchasing a home that will become a rental property.  

Personally I enjoy optimizing my properties.

The time you spend will be directly related to your investment strategy, the quality of the properties, and quality of tenants you are able to attract with them.I developed my strategy while holding a full time job, so developing a strategy in which I could minimize my time spent on property management, and optimize cash flow was key!

So this is the way I've read is the optimal way to do it...Get new policy with myself as first insured, seller as additional insured (since their name is still on the mortgage), and bank as mortgagee. 

The machines would take the wall and optimize the cuts to get the most out if each piece of lumber, minimizing waste and material costs.