Mortgage Note Deal Review
Calvin Ewing
Helping People Obtain Above Average Returns Backed By Real Estate - Note Buyer | Real Estate Investor |
Update on the Memphis Note: Deal or No Deal?
Since my last newsletter, there have been some interesting developments as I delved deeper into the due diligence process for a non-performing mortgage note deal in Memphis. As with every real estate deal I undertake, I learn something new, and I like to share my findings with readers who are interested in real estate and mortgage note investing.
Overall, this deal looked promising from the get-go, as all three of my potential exit strategies appeared to be profitable, as I describe in the video above. These are:
However, there is a problem with the note seller and their incomplete mortgage servicing notes for this mortgage note, which could pose a significant obstacle to exit strategy #1, preventing us from foreclosing successfully. Since foreclosure is the most likely outcome with this note deal, I do not wish to put my private investor's funds at risk by proceeding with buying this note and commencing with a foreclosure that could go sideways.
Therefore, unfortunately, this deal is a "NO DEAL" for me.
New Performing Note: Ohio Contract For Deed
Luckily when one deal doesn’t work out, there are always other opportunities out there. Here’s a new performing note deal I am looking at in Ohio. This is one actually not a mortgage but a Contract for Deed (also known as a land contract).
A contract for deed is a real estate transaction where the seller provides financing for the buyer to purchase the property, and the buyer makes payments directly to the seller over a specific period of time. The contract outlines the purchase price, payment schedule, and consequences for default, and the seller retains legal title until the purchase price is paid in full.
For our intents and purposes, buying a performing contract for deed or buying a performing mortgage note have the same result. Great monthly cashflow if you can buy it right!
The video above gets more into the details, but here is why I like this deal and hope that the seller will accept my $33,000 counter offer.
? Estimated Property Value: $93,500
? Unpaid Principal Balance: $40,712.73 (Loan to Value: 43.5%)
? Our Purchase Price: $33,000 (ITV: 35%)
? Principle and Interest Payment: $460.25
? Yield: 16.7%
This one still requires due diligence but at the early stages, it looks like it can be an nice little passive income generating machine!
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5 个月do you buy 2nd position non performing notes?