NEXT DEAL (#11 officially) EDGE action thanks to Dean! Buying a NPN b4 auction

Hey Tammy,

I've not purchase notes/discounted notes YET. so can't speak from experience.

But my thoughts....

Even if purchased the note at a discount and seller did a Quit Claim to you, wouldn't you therefore be responsible for curing the loan and stopping the foreclosure proceedings? Provided you may be able to negotiate a discount/settlement amount of the existing. If there is DIL wouldn't that only stop the foreclosure if dealt directly with loan holder? If so the DIL therefore cancels the foreclosure because that essentially what the DIL is doing, surrendering. Therefore, no actual foreclosure to hit credit. just late payments and DIL

Wouldn't a title search provide the last recorded to lead you to the actual note holder provided it's been sold/purchased from original

just thoughts/points..... obviously I'm missing some key points/knowledge

got this bookmarked to follow (AND learn something - lol)

When I buy the note, I'm the one that owns it and can choose to foreclose or... do cash for keys to get the deed. Seller's already agreed to it verbally and will put it in writing. They are anxious too because they will get something when before all they were getting is a foreclosure. Otherwise they'd get no cash at all; its a win/win all the way around! . I wouldn't have to cure it because I'd HOLD the note! Isn't that AWESOME???? I LOVE REI!! I'll probably have to cancel the sherrif's sale somehow, but I'm in new territory here, so I can't wait to call the SA

Title just shows the servicer; not necessarily the one who holds the note. Its weird how they do it, but usually when a loan is originated its sold right away, and many times you won't even know about it because it remains in the original lender's name and they act as the loan servicer.

Wish I could have moved on this already.

Tammy,

just a thought...
from the Edge 2010 Talmadge Bell talked about notes; wondering if you could get his advice somehow...

He listed Eric Swanson from www.thenotepeople.com and Dave Krunic from www.reliantfinancial.com as funding sources, but you may be able to get some advice too?

You are always thinking outside the box... please post about the outcome of this transaction for us to learn something new.

Thank you so much for sharing,

Valerie

Just out of curiosity, if the loan is for $200k, would the bank actually accept 50k? Basically I am just asking how you got all the way down to offer 30-50k.

Kiel

with someone who renegotiates mortgages and has them forgiven and they go anywhere from 10%-40% because they're non performing. I am about to test that theory; he uses it all the time; so we'll see. I will keep everyone updated!

As I'm understanding it, and I may be wrong, but most of the banks and mortgages have insurance, so no matter what the bank gets they have insurance to cover the loss.

but still too early to call. Its driving me bananas!

is sending a letter of authorization to the bank so I can have access to their financial records at the bank on the house. Excited to get this moving! Doing this will allow me to talk to the bank directly about the loan; including offering to buy the non performing note.

Got the seller's signed authorization form. Called Diane at the SA again. She advised me of just what I should say to them when I call them.

Today I also had professional pictures taken of my primary residence, another deal I'm working on selling with a 1 day auction. I love REI!

Hi Tammy

I am very interested in all the specifics of this thread of posts. I have a deal I have been working on where the sellers have two newer manufactured homes on 15 acres in the nearest town to Yosemite NP. Great rental income potential since almost all park employees and concession employees live outside the park and commute in. The property is currently listed with a realtor who says the sellers are very discouraged and just want to do a deed in lieu with the bank.

Is your seller also listed with an agent? How do I get around the agent so that I can negotiate directly with the seller then the bank. I also have been told by the realtor that the sellers have just started missing payments.

With the realtor involved I don't know how to proceed, unless I can negotiate with the sellers directly. I know they owe about $145,000, the property is probably worth $190,000.

Any advice would be welcome.

Thanks

Judi

My seller is not listed with an agent. I am new to this note buying thing, but you can still buy a note if its listed with a realtor, but you do have to get the authorization from the seller first to talk to the bank about the loan. Or, maybe there's another way I don't know about; I mean had I not had the success academy I would have probably just called the bank with the address and asked if I could buy the note. LOL But, who knows, there probably is a way to do it that way as well I'd imagine.

As far as getting around the agent, you can either work with the agent and get the authorization form, or you can try to wait until the listing is expired. If they are close to foreclosure, there is probably another way to talk to the bank about purchasing the deed. Maybe someone here can fill in the details. I believe this is the way Dean did his deal, but he didn't go into details all of how he did it, just that he did it knowing absolutely nothing and calling in about some land that he wanted to acquire; I don't think he was working with the seller at all.

I'm calling the bank tomorrow.

Tammy
I will check back to see how it goes for you. And I will call the coaches as well. I will also talk to the realtor again.

You continue to inspire me.

Judi

Congrats on undertaking a challenging circumstance!! This is the best way to learn.Very interesting deal and I too will be keeping up with your update to learn more!!! Fine job on all you r doing! !
jay

I have a friend who buys nothing but non-performing 2nd notes from banks all day long... he gets them performing again, offers the homeowners affordable payments and after a bit get's them to re-fi out and he is paid in full...He is paying 2K for a 20K note. Everything that you can do with real estate you can do with notes. I have been curious about what Tammy is attempting, I will be checking back to see how it goes...
Barbara

I apologize if I accidentally flagged the post as offensive while scrolling thru on my Droid.

I'm hoping no matter the outcome of this deal it will become a thread to look back on that will have some 'teaching' matter to it. Its all new to me too, so I'm learning and you guys are coming along with me.

So, I talked to the bank and faxed over the authorization form. They need 24 hours to get it in the system; its still not in today, but I keep on calling.

I also called the RESA on what to do if you don't have an authorization from the seller. There are SO many homes I could do this with around here and its a great way around the flipped values here in Southern California. *idea light bulb above my head*. Its exciting learning as I'm doing. I don't know if this deal will end up the way I like, but its a great way to learn and the worst they can do is laugh at me, right?

Calling the RESA again on a few more questions I have. Never be afraid to ask questions, especially if you're with the RESA! Call them all day long if you have to, that's what they're there for and what you paid to have access to. And, they are great to talk to

with the loan servicer. Wow, I got transferred at least 6 times, and ended up leaving a message for the guy who supposedly can help me.

Now, this seller filed bankruptcy, and has been delinquent since 2009, but I was told by one person it won't go to foreclosure and another it would because they have started not making their payments again. It seems the loan servicer is about as clueless as me.

I'm hoping the guy I finally left a message for will help guide me and steer me in the right direction. Now, one of the ladies I spoke with said they could do a loan modification, but my seller said they'd already tried that and got nowhere. I told my seller to keep trying, but they have just HAD IT with the loan and the house and don't even want to bother. I wish I could help them to try for the modification so they didn't lose the house altogether, but it seems like they aren't going to foreclose any time soon because they are so disorganized.

I will be sure to keep updating this thread with the journey on this deal. And a journey is DEFINITELY what it is ending up being... lots of going around in circles chasing my tail.

i may have missed it, but can i ask what your intentions are for the note and house?

Well, I have an end buyer ready to buy it right now. Was going to give cash for keys to the sellers and then sell it to the end buyer immediately. Or, I have the option of modifying the loan for the current owners because the current noteholder didn't do it, and make it affordable for the current owners to keep living there. It would all depend on what I can buy the note for. The current owners are fed up trying to deal with the bank its with, don't want to try short selling because they've had a bankruptcy which makes a short sale very difficult, so I'm being creative based on something Dean talked about at the EDGE.

The premise and my thinking is because its a non performing note, the bank will sell it at a discount; which means I will acquire the 'note' for under FMV. Then, I give the cash for keys, have the home quick claim deeded to me, I become the owner of the property at that point. Then I can do with it what I please. But, I do already have the buyer for this particular home.

I am basically CREATING a deal out of thin air, or that is what I'm ATTEMPTING to do here. Whether it closes or not, this thread will be one to look back on!

and for good reason. Flying by the seat of our pants is always exciting...we just have to watch out for the landing!! LOL The infor provided in this thread is a very, rare gem for you as well as the the rest of us. It is bookmarked and Im def gonna keep track. Thank you for sharing it. Sic 'em!

Any updates on how this one worked out?

Yessssss?!?! We are very excited to hear any updates you have

Anything new on this? Sounds like a great strategy!

- Tom

Tammy,

I would like to know if this strategy worked for you, or not... either way if you give us some details it will be of great value to all of us here.

Thank you for being so 'adventureous' and thinking outside the box all the way!

Valerie

sorry to keep everyone waiting. Things are still where they are last I talked. I did convince my seller to try for a loan modification again; last she tried was over a year ago. I told her that she needs to be VERY thorough with all the paperwork and not leave anything out, but it doesn't hurt to try again. I am more for helping out the homeowner than just getting a deal. I do have the contact at the bank, but the week prior, I was prepping my auction house, and then the past week I took a much needed break. Now, I plan on calling my contact at the bank to negotiate buying the note; because if they won't modify the loan, I will for the seller.

So, its a little different strategy right now; my goal is to keep the seller in their property that they love, but I'm still doing the same thing with it. And, as soon as I call the bank, I will update this thread; because if I can learn about this, it is definitely something I want to do with other properties that are upside (EVERYWHERE around here! )

I'm also working on trying to refi and having a hang of a time. I have to make a post on the trials and tribulations of getting a 5th rental property, because it is a rollercoaster ride as well!

SO if I understand you correctly, if the bank won't modify the loan you will purchase the (non-performing) note and by keeping the sellers in the property, you in essence will become their bank. Oh, ok, it just clicked in my mind, this is something similar to what Greg Murphy does correct? Except with a L/O, you're getting a discounted note and then adjusting the numbers with the seller for a win/win.
Your original strategy was to buy the note at a great discount and then sell it for a profit. Now you changed it up to buy the note at a discount and get the profit from the seller in terms of interest... etc.

Right?

Tammy,

I don't think I know anyone who has been able to get a loan modification... it's just not very lucrative for the banks to do them.

but, if the bank sells you the note, you'll have to get money to pay for it, right? and then you plan to let the owner stay in the house and pay you?
How are you planning to finance the note? Can you get a loan to buy a note, or is it cash only?

thanks for sharing! something I'd like to learn to do too...

Valerie

Welll, I calld the bank last week; only to be transferred about 20 times and then hung up on. I recalled today, and despite them having the authorization, they refuse to talk to me at all or even so much as transfer me ANYWHERE, including the person in charge of selling notes. I am baffled. All they said is you need to talk to the seller, which I did yesterday and they confirmed they want to go forward and SELL it and not try to do a loan modification on it. The gal at the bank was rude and very uncooperative on what my next steps should be and just said talk to the seller, which I'm already doing. So, my next step will to be call in with the seller on the phone with me in a conference call.

Its like pulling teeth! aaarrrgggghhhhhhhhhhhhh!

It is CERTAIN though, that I will SUCCEED!!!

and I realize I didn't answer, how I was going to pay for the note. I have a transactional funder that will fund the purchase of the note with an end buyer for 10 days. AND, if I was to hold onto the note, I have another lender that will finance the purchase of the note as well. They are out there!

when I call the bank. AND, the bank came in last week to shut off their water. MIND, they haven't received a date of sheriff's sale yet. YESTERDAY the owner went there and they had PADLOCKED them out of their own house with many of their belongings in there. NOW, according to her, and from researching public records, and no public notice of sheriff's sale has been ordered. They have belongings in the house they can't get out, and have no access to the house which they still on the records own.

What type of lawyer needs to be involved to fight for them. They may end up getting their house back free for not following proper procedures here. I can't believe the GALL of this bank!

I'm determined to help this seller especially since I find out all these shenanigans the bank is pulling!!!

Thank you for keeping us updated. Wow sounds very interesting...I am curious to see this all play out and i applaud your valiant efforts!! Who did you use for your transactional funding if i might ask?