Mark,It is not hard to buy REO's at a big discount all you need is money.Joe Gore

I would say that 20% would be a steep discount for a note with this much security.

Please note, this example is simplified for explanation purposes, discounted purchases and cost reductions per accounting rules will apply in some cases.

Thank you all for your replies.Bill- The per sq ft numbers help tremendously , I will be looking into this furtherWayne- You are correct, my realtor and myself were having trouble getting ahold of anyone in regards to this property.

This has much to do with the steep discounts on these notes.Sellers or Realtors are not loan underwriters, these parties have a vested interest in doing a deal.

A buyer (especially in commercial) will ascertain a value based on fair market rents, appreciation, future depreciation, maintenance and market much like a purchase, the period over the option term is then discounted to its present value to reflect the value of an option.

Holding property has risks, but you could buy discounted notes or tax liens, or you could develop and sell options within your plan.

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But when I talk to realtors, they claim that is a bogus estimate and that it is close to impossible to get that kind of discount.