Note Investors: Helping People Stay in Their Homes
Ms. Solomon was desperately trying to help her father. She became the financial and medical advocate for him since her mothers passing in 2011. Her father was in poor health and simply unable to afford the mortgage on the property that he and his wife had shared. Letters to the bank went unanswered and the future was uncertain.
The property value had dropped on their Florida home to $60,000; far less than the $110,000 that was owed. Ms. Solomon was desperate to work with the bank but wasn’t able to find anyone who could help her. Her goal was very clear: she wanted to make a short payoff so that she could move into the house and provide for her ailing father.
The note and mortgage was sold by the bank and eventually purchased for $35,000 by NoteSchool students, TJ and Rick. These business partners studied the file and recognized that the father and daughter were emotionally attached to the property. They simply wanted someone to listen to them and to work out a solution. TJ and Rick did just that.
TJ and Rick were able to quickly present 2 options for Ms. Solomon:
Option 1: A short payoff of $55,000.
Option 2: $35,000 payoff with a new $35,000 loan.
If she chose Option 1, TJ and Rick were willing to forgive 50% of the loan. In addition, they would forgive all past due payments and waive their deficiency clause.
If she chose Option 2, they would reduce the balance of the loan to $35,000. They would also reduce the interest rate to 5%, shorten the payoff to 72 and lower their payment to $564 per month.
Ms. Solomon chose Option 1. This lingering problem was solved very quickly once TJ and Rick owned the note. Ms. Solomon was able to keep her father in his comfortable and familiar surroundings without the fear of losing the home.
The solution to this real estate crisis is the entrepreneur. Unlike big lenders, entrepreneurs such as note buyers have the ability to make quick and nimble decisions. These quick decisions can make the difference between somebody remaining in their home or having to move out.
~ Joseph Varnadore
Want to learn more? Be sure to check out the Educator Page for Eddie Speed and NotesSchool where Joe is one of the very experienced investor instructors. And be sure to save the dates in January when NoteSchool’s founder, Eddie Speed will be in Kansas City as you will not want to miss either event.
Meet Joe Varnadore:
Joe Varnadore invested in his first property at the age of 19, and has since created, brokered, bought, and sold more than 10,000 real estate notes on both residential and commercial properties. As an author, speaker, and trainer for the past 25 years, he believes that there has never been a greater opportunity for real estate investors to use non-performing notes to acquire properties and seller financing to cash out.