Yes, you are borrowing from yourself and paying yourself back at a low rate, but that big chunk of money is no longer performing for you in your 401k.If you take $50k that is earning you say 8% in your 401k and move that money to pay down the principle balance on your 4.9% tax deductible mortgage you're not putting the money to good use.

If I decide to teach a class on buying non performing notes, I bet I would have a full house of new comers everyday, and all would be willing to drop $3000 each to hear me speak about notes and teach them things that they never heard before on how the note business will make them money...Joe Gore

If the non-performing loan is being purchased, for $100,000, has a Broker Price Opinion of $200,000, and the hard money lender will lend up to 75% LTV, then the loan amount would be, $50,000 more than the purchase price.

I hate to admit it but I'd give up a couple grand do sell a deal to someone I know, trust and can be certain they will perform with no issues.

Obviously some of these expenses won't disappear entirely, but could be run differently (coin laundry for example - you could opt to not renew when the lease is up and instead buy your own machines) but perhaps could be performed for much cheaper price (i.e. gardeners).

My intentions are to perform a cash out refinance and within a few months, I would like purchase a new home and lease my existing property.Many lenders I am dealing with claim to have programs that can perform to my intentions.

Perhaps it's because I don't have tons of cash standing around, I don't want partners, and I don't completely trust the risk equation of larger more expensive Class A projects - these are the only kind of rentals I buy.Assuming you want a project and you can and will put in the elbow grease - If they are performing and in an okay location and in rentable shape with good bones, $6k - $7k income with value-add potential for $100k is a great deal.They should cash flow enough to pay for almost all repairs except for large capital, but then again you should be able to save for those out of cash flow, or refinance in a few years.If they are willing to hold the note for a couple of years, you could offer them a high interest rate if they finance the entire thing for two years, or maybe they can take %10 down.

OK lay it on me everyone.I'm looking at purchasing a few baby notes in Florida - non-performing firsts.I've purchased many in the Nashville area and all over the state of Tennessee.

Getting a lease gives you possession under a leasehold interest.Work with motivated and agreeable owners, you won't have issues with them performing. :)

The simple example would be working with a performing loan and working with a non-performing loan.