Triple win real estate investment

On May we acquired a non-performing land contract secured by a house in Muskegon MI from a Hedge fund. We had never invested in Muskegon before, therefore we spent some time researching the town and spotting the areas in which our investment was more secure.

What I liked about the note

I hired a local realtor for a broker price opinion. After looking at the property he gave us a price opinion of 42,000.00 which worked perfectly for us. We verified the comps and they seemed to be valid comps, also the pictures of the house showed pride of ownership, the property was in good shape and had no signs of delayed maintenance.

The borrower had a balance of 36k and was 10 months late, the interest rate on the land contract is 9.9% and the price was 9,000.00.

We funded the investment with the self-directed IRA of our joint venture partner.

Workout:

After a short out-reach we made contact with the borrower, she had a life-changing event and was in the process of getting a steady income.

We agreed on accepting a skin payment of 500 and regular monthly payments, so far we received 10 on-time payments. Therefore in a couple more payments, we will sell this re-performing land contract and cash out.

We foresee above 50% returns on this note. Another SDIRA on its way to above average returns.

That is what I call a triple win!