How to ANALYZE the Non Performing mortgage Notes you want to
buy.
This is Blog 2 of the FACTS system that I created for
Non-Performing Notes. This Blog clarifies the A part to “ANALYZE the list of
Notes” to select the ones that are safe and profitable within a short period of
time and effort.
When you approach a bank and offer to buy a portfolio of
non-performing mortgage notes the bank usually gives you 45 days to perform
your own due diligence.
The five key elements you want to verify:
1) The property
value: It must be high
enough to make profit (based on comps- location- condition and potential)
2) The loan
documents: Must have been
drafted properly (First Lien) for ease of foreclosure in case that’s the chosen
route
3) The property liens:
No pending liens or other issues such as tax obligations, code
enforcement, utilities unpaid etc.
4) The Borrower
financial status: Borrower
preferably should have a good credit history except for recent and sudden
problems causing him/her to default
5) The Bank discount:
Must be low enough to leave
room for risk reduction and profit potential
6) The Process the
bank uses to sell the list to bidders so you can follow up and close on
the transaction, and not waste your time and then they sell the list to another
bidder.
In the next blogs we will discuss how to control that list
to negotiate the best price and terms.
Sincerely,
Cherif Medawar
I find it difficult to subscribe RSS feeds, bookmark this site anyway I have is a very useful and complete information.
ReplyDeletenon performing notes for sale