Some of you asked about the note I was buying, so I thought an update would be good. For those of you who missed it here is a recap:
I bought a note for $30,000 in April on a duplex in Indianapolis.
This is a non-performing note, meaning that the borrower is not paying the payment. In fact he has not paid since 2008.
I bought it through a note broker who had it on a list from a pension fund and who bought a bunch of notes and then did not know what to do with them. The guys who gave them the notes said it’s a great return blah blah, but they were actually very weak loans.
Anyway, the homeowner should be paying $634 per month on a $72,000 note at 10.05%. He is in arrears by a lot (no payments made since September 2008), so he owes somewhere around $102,000.
I finally got the assignment of the note from the current owner, after 2 months of slowness and sloppiness by the seller of the note.
I have started the process of contacting or attempting to make contact with the borrower. Won’t he be surprised (shocked) to hear from a lender after all these years! He probably figured that the loan had “evaporated”.
So in 2 weeks, if he doesn’t respond to letters and phone calls, we will send someone to the property. The servicer does all this. Though I could do it myself, it wouldn’t be prudent. After 30 days we can start foreclosure.
So here’s what could happen:
1. If he doesn’t respond, we start foreclosure and start legal proceedings to get the rents (mortgage has an assignment of rents clause), and maybe resell or rent/keep collecting the rents.
2. He does respond, and has the cash to pay me $100,000 😉 lol
3. He does respond, and we work something out to get him back on track with the payments
By mid-September I should have an update.
To learn more about buying a note and the kinds of notes, email me at Athena@AthenaPaquette.com, and I will be glad to send you a podcast I did on notes.
I will also have a see and learn tour when I have resolution so you can see this property and more.
As many of you know, I have loved Indiana as an investment area for 2-3 years, and finally am scouring for deals.