Funding to buy Commercial Defaulted Paper

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Posted by Steve C (TX) on August 15, 2001 at 22:13:14:

I got a call from a motivated seller of a commercial property. They operate a business from the building. They are behind on their payments to the private leinholder and worse yet, they have about $30K business judgement liens against the property. They owe back taxes too so to just buy the property would be about 30-40K cash depending on if I could negotiate a discount on the liens (preliminary indication is that very little negotiating can be done). The loan is assumable. I just had a thought that if I could get financing to buy the 1st for about 90K and then foreclose, I could wipe out the liens, be in the property for little down. Maybe even buying a couple years of payments fro the note holder would give me time to forclose, fix, lease, and sell.

The first lien balance is about 114K but the property is worth as-is about 170K. The property will cash flow very nicely if I put tenants in it, then the value could be at least 225K. Lot’s of upside, but I need a lender to work with. Does this seem feasable ... what would it take to make this happen?

Regards,
Steve

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