Buying Note On Foreclosed Property
Does anyone know of any lenders that will loan money for the purpose of buying a Real Estate note on a home that is in foreclosurer. We are interested in getting ahold of a note for a home worth $300,000. We can purchase this note for $125,000 if we can find the money. Our plans are to take over the foreclosure process. The note is currently worth 165,000.
My first question is the lender willing to sell the note to you?
[addsig]
Yes he is willing to sell. But it is not a lender, he is just a Real Estate investor who owner financed this home a few years ago and who is willing to help my company get its foot in the door so to speak.
I would just make sure that you do your homework on this note to make sure of it's position and any other liens that may be Senior to it. Though it does sound like a good deal, I don't know too many people that are willing to give up $175K of equity to "help someone get their foot in the door".
As far as a loan goes, it will depend on your creditworthiness. No lender will loan on a note that payments are being made on so you will need to offer up other assets to secure the loan or have a line of credit from the bank to pay it off. If you have all your ducks in a row and clear documentation of everything, you may be able to talk an ambitioushard money lender into lending you the money.
I would put the note under contract for as long as possible to work out any surprises, try to get a deed in lieu of foreclosure from the seller, and to maybe purchase the note right before the foreclosure was final.
Definitely make sure you do your due diligence before you buy the note. I love buying notes--so much easier than a short sale. I've had good luck getting 'private money' from other investors I know. Once you have the note and get title, you should be able to get a loan on the property pretty easily. Or you can just whole sale the property to someone else and walk away with some cash.
As you've been told, pvt investors love these and one of them would take it and give you a piece of the deal for bringing it to him.