Posted by Lisa in Oz on May 10, 2000 at 17:58:46:
The Cash Flow forum would be a better place to ask your question.
Good Luck
Buying paper: Instinct says “no brainer” but ignorance holds me back - Posted by Ben (FL)
Posted by Ben (FL) on May 10, 2000 at 16:38:13:
I am buying this guys house that is being foreclosed on. He mentioned to me, in passig, that he is holding a 2nd mortgage on a house with an $18,000 balance. I mentioned to him that he could convert that to cash. He brightened up, and said, “Really, how much?” I said “someone” might give you $6,000 for it. He was very interested.
He showed me the note. It originated in 1988. Payments are $317 per month and they are made every month, one to two weeks late, like clockwork. The only twist is the original note holder sold the house to their kids. Now I’m thinking “I know a guy that’ll loan me $6,000 at 18% ($90 per month payments) in a heartbeat. $317 - $90 sounds like gold to me.” Am I missing something, or should I beat feet back to this guy’s house and show him the money?
Try the Cash Flow Forum (nt) - Posted by Lisa in Oz
Posted by Lisa in Oz on May 10, 2000 at 18:00:46:
nt
Re: Buying paper: Instinct says “no brainer” but ignorance holds me back - Posted by Steve-Atl
Posted by Steve-Atl on May 10, 2000 at 17:20:03:
At face value, it seems like a good deal, but I would want to know the following:
Is the property one I would like to own?..(In case I had to take it back.)
What is the total loan to value? Does the $16k represent a high LTV? If so, its not worth very much.
Are there any liens or judgements on the property?
What is the remaining term on the loan? Is there a balloon?
Also, if I decided to purchase it, I would have the transaction closed by an attorney and I would get mortgagee title insurance.
Just a few thoughts. Good Luck!