Should I buy this note…expecting all-out WAR ! (long) - Posted by Ben (NJ)
Posted by Ben (NJ) on March 11, 2000 at 13:10:53:
In a recent post I mentioned that I am foreclosing on a tax lien on a beautiful suburban home worth about $500,000. The pay off figure on my lien is $46,000. The bank who holds a first mortgage (junior to me) is owed $237,000. The bank is also foreclosing on this property for the SECOND time in five years and has agreed to sell me the note so I can proceed with my foreclosure to judgment. Here is the rub, I just found out that the property owner is a tough, experienced certified civil trial attorney (this means he has done so many trials to verdict that he has achieved a special designation from the state). He may also have committed bank fraud because the home is owned by his corporation and in order to allow him to do this he had to represent to the bank that this was rental property but he moved right in. Anyway, I am expecting an absolute full-scale BLOOD BATH of a defense from this guy replete with multiple, drawn out and staggered bankruptcies, with every motion made and every delay possible (of course since he will be his own attorney it it won’t cost him a dime in legal fees)I will also have to continue to pick up the taxes as long as this goes on ($10,000 per year). I have two choices, 1) don’t buy the note, then the bank will just pay off my lien, I will walk away with a nice profit from the interest and he will be their problem, 2) discount the note HUGELY to make all the potential aggravation worthwhile. What do you think ? If I choose # 2, what should my number be?