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May 25, 2017

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13 Notes in Texas!

May 25, 2017

Today we have thirteen non-performing land contracts here in Texas. Now that's pretty rare because the inventory in Texas is low. We just have a very healthy economy right now and on top of that there's so much investor money that's out there. You know the guys with we buy houses signs and sending out postcards that for the contracts to actually be in default is again a rarity. I wanted to go over just what we have available and as always if you have any questions, let me know. Now about these, I am in negotiations with the seller, so I don't own them yet. That's why the list is going to be scrubbed a little bit more than normal, but I wanted to show you guys that we have a couple in Dallas and Fort Worth, Temple if you're looking for something between Dallas and Austin, nothing in Austin but San Antonio and also Houston as well. That's five in the major metropolitan areas and the other of the thirteen are going to be in more rural spots. What's interesting about this portfolio is that we're needing to buy twenty-five notes total in the portfolio, so we're going to be teaming up with some other investors to be able to get all of these, and especially at a great discount. By taking a look at the notes, one, here's the cities. As I mentioned like Gun Barrel City is a small little touristy town outside of Dallas. We have our Fort Worth, our San Antonio, let's see, Houston, and here's our UPB, or current principal balance. The sum of it is about $540,000 and change. I talked with the broker on this and they're saying we've got to get it for 55 cents on the dollar because these are land contracts. Now the big difference is with your standard, non-performing, institutional note that you have to go through the foreclosure process and that takes a little bit more time. Because these are land contracts think of them as a lease option or really as the bank or the owner of the property, we would be able to evict whoever is in the house because they don't technically own the property yet, so because we don't have to go through the court systems, there's a little bit of a premium associated with it. What I want to go over is the San Antonio property. Here across the board we can see it's fifty-three thousand is the unpaid balance. Your taxes and insurance are about a hundred and fifty bucks, but the payment and interest is four hundred and seventy-five so those numbers are pretty solid. The status on this is it's more than ninety days behind, so again going through the eviction process should be pretty straightforward. It's in collections but this is the one thing that we want to pay attention to is that there hasn't really been any formal warnings that well the note's going to be sold off and they could possibly be evicted from the property. There is going to be a bit of a time frame with going through with the proper channels of an eviction. When we look at the notes or the rates of it, I really like this because with these seller-financed deals this isn't going to be your institutional pricing. These are more high-risk clientele so the interest rates are going to reflect that. I mean these notes already if we got them non-performing are at seven percent, eight, nine, most of them at ten percent. If we're able to get those at fifty-five cents on the dollar and they're already at ten percent, that's some really good cash flow on these properties if we get them re-performing. I will say with the current UPBs and values on the properties, they're a little bit on the lower side, so your sub-hundred thousand dollar properties and that means that they're going to be riskier. There's not going to be as much meat on the bone per deal but on this portfolio we're looking at ... What is that two hundred and fifty thousand dollars as potential profit on this if we get these re-performing again. These notes have also been working out for most of the time. You're looking at two hundred and sixteen months on average for the remaining term on them. All in all I just think it's a really attractive portfolio. Again, if you're going by that fifty cents on the dollar as your absolute maximum, this isn't going to fit but if you're looking for something where you don't have to evict, where these people have already put in a substantial sum of money, with seller financing most people are asking ten to twenty percent down. These are going to be motivated sellers and they're going to want to stay in the property. Again let me know if you guys have any questions. As always you can reach me Greg@GJSCV.com or give me a call and I'll be more than happy to talk with you soon.

 

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