Newbie buying note has question! - Posted by Chris

Posted by Tim (Atlanta) on November 16, 2000 at 07:11:29:

I am not sure why you would not have bought that note yet. If you pay $4000, you will be getting a 56% yield, for a note in the first position, at a ITV of 3%. If you can buy it at that, do it. If you still don’t think it is a good idea, send the seller my way. I would snap that one up today.

Newbie buying note has question! - Posted by Chris

Posted by Chris on November 16, 2000 at 05:40:03:

I am looking at buying a note that originated at $9400. The house itself is appraised at $144,000. In a good area. Balance of this note is now at $7003. It is now seasoned 15 months current on all payments. The main mortgage has been refinanced bringing this second note into first place at 11% interest, payment is $229. for 37 more months. I am looking at paying not more than $4000. for this note. Does this sound like a good buy to you more seasoned buyers out there? Need to know soon what the experts think. Please help.

If it sounds too good to be true… - Posted by Michael Morrongiello

Posted by Michael Morrongiello on November 16, 2000 at 11:22:52:

Tim is right, if this deal does CHECK out to be a $7,003 1st lien on a house worth $144K + with a juinor lender behind it, where is the RISK here?

A word of caution, Make SURE that the note you are buying is truly IN a 1st lien position and did continue to subordinate when the refinancing took place. Otherwise you might finding out that you are really buying a HIGH RISK smaller 2nd lien sitting behind a much larger underlying 1st lien.

PS. if you want to simply “broker” this deal and make a few $$$ for doing so rather than taking on the actual investment yourself, call me, I’ll write you a check for around $6K and close this baby FAST.

To your success,

Michael Morrongiello