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How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure
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How to Buy Real Estate Notes: 5 Note Buying Exit Strategies & Foreclosure

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http://www.NoteBuyingProfits.com No-nonsense Note Buying Information. Up-to-date! Hours of FREE Note Buying Training Videos, Free 1-on-1 Coaching Session! Click or Call 718-783-7605

http://www.NoteBuyingProfits.com No-nonsense Note Buying Information. Up-to-date! Hours of FREE Note Buying Training Videos, Free 1-on-1 Coaching Session! Click or Call 718-783-7605

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  • 1. Week 5: The 5 Exits The 8 – Week Roadmap to Launching into Notes 1
  • 2. Agenda Following the Roadmap Step by Step: Step-by-Step: • The 5 Exits – what they are • Reperform • Refinance R fi • Discounted payoff (e.g. Short Sale) • Foreclosure (2 outcomes from this: TPS / REO) • Sell note • Examples to illustrate a few of these 2
  • 3. A Quick Review • We ve We’ve closed on a note • RESPA • Servicer • Borrower contact • Workouts • We’re “working the note out” • To make dollars and cents! 3
  • 4. Using an example DEAL 1 • FMV $120,000 • UPB on 1st $64,276.05 • UPB on 2nd $19,000.00 • U UPB tota total $83, 6 05 $83,276.05 • “Equity” $36,723.95 You buy 2nd: • $2,000.00 $2 000 00 4
  • 5. Deal #1 – cont cont. The 2nd originated in 1997, $25,000.00 @ 13.250% • for 20 years • The monthly payment was $297.00, but due to arrears, bank was asking $353.00 g • It’s non-performing – borrower couldn’t pay the $353 • What are your exit strategy options? 5
  • 6. This Deal Looks Like … • Home worth ~$120K • So inv’t-to-value of 55% “Equity” of $54K 2nd of $19K • Bought 2nd for $2K • Total o $66 “into o a of $66K o the deal” 1st of $64K 6
  • 7. The Exit Strategies Again … • The 5 Exits – what they are: • Reperform • Refinance R fi • Discounted payoff (e.g. Short Sale) • Foreclosure (2 outcomes from this: TPS / REO) • Sell note 7
  • 8. Selected strategy… strategy • Reperform (loan mod t l R f (l d to lower payments b k d t back down to $297) • Received 2 payments of $297 8
  • 9. Whoops … wrinkle in the strategy Y find out the 1st i suddenly f • You fi d t th is dd l foreclosing! li! • So what do you do now? First, what explains this? She’s paying the 2nd! • • The 5 Exits – what they are: • Reperform • Refinance • Discounted payoff (e.g. Short Sale) • Foreclosure (2 outcomes from this: TPS / REO) • Sell note 9
  • 10. Options • Reinstate th 1 t R i t t the 1st • See if borrower pays on the full amount due on the 2nd, if not, start foreclosure yourself • Talk to the borrower – reperform both?! p • Can she really afford both loans? If not, help her with a sale of the property l f th t Let the 1st go to sale – bid at sale • 10
  • 11. Letting the 1st go to sale … what this looks like $120K – home value Above this, you make money k A bid of 66% of 2nd of $19K the home’s value $66K = $79K You would make 1st of $64K $ $13K over y your $2K investment 11
  • 12. Example #2 – “Safe” Safe • Home worth ~$750K • So inv’t-to-value of 53% (assuming paying full UPB) – “Equity” oh, it’ a performing note h it’s f i t of $350K • Bank wants to sell 2nd No the 1st for $350K • Note “matures” on Jan 31, 1st of $396K 2009 – can call the entire loan due 12
  • 13. Investigating … what’s going on? • 20 questions ti • Understand as much as you can • In order to determine if you do (or do not) want to buy a loan 13
  • 14. Federal Heights, Salt Lake City Heights 14
  • 15. What you would have found out • Property is listed for $ py $1.25M – tony area in Salt Lake y City suburbs • Realtor was never able to show the home in 6 months (borrower was “sick”) • Bank wanted to sell loan because this was a “sensitive” loan • Bank said very little about borrower • When pressed, bank admitted “business relationship” p , p between borrower and bank • When pressed, realtor admitted borrower was p , “extremely well connected” 15
  • 16. So … now what? • What’s Wh t’ your E it St t Exit Strategy going t be? i to b ? • The 5 Exits – what they are: • Reperform • Refinance • Discounted payoff (e.g. Short Sale) Di td ff ( Sh t S l ) • Foreclosure (2 outcomes from this: TPS / REO) • Sell note 16
  • 17. Next – Week 6 – Servicing & REOs January 21: 5pm PT, 8pm ET Week 6 of the Roadmap – How to Manage REO’s and REO s what it means to “service” your notes Watch for our January Guest Tele-Seminar: y “Newbie” investor who just bought his first 8 notes – tales of experience … and success success. 17

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