Reverse Mortgages vs. Notes: Deal Evaluation & Bidding Strategies

Foreign this is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson. Hey everybody, Scott Carson here. Just want to say thank you again for listening to the podcast. If you've been listening for a while, you're subscribed to the podcast. First of all, thank you. Second of all, hey, you know, if you're you're not one of our coaching students or you haven't signed up for one of our three day workshops, here's an opportunity for you. You want to check out our WCN membership. This is the biggest bang for the buck of the notice street. Besides our one on one coaching, this is our monthly membership for 97amonth that gives you access to all of our online training, our virtual workshops, our note weekends, our special one day master classes that we've taught in the past, anything that we have going in the future, as long as you're a live member, if I can't make you or save you $97 a month, I'm doing something wrong. But save you paying 997 or 99 bucks or 399 here or anything like that. We make it affordable at $97 a month and like I said, it gives you access to all of our past replays, our upcoming classes, our access to our special classes. We also do weekly coaching calls with our WC members and also our WC members also get first crack at tapes and lists of notes that we get in after our one on one coach to take a look at them. But it's a great way for you to go. You can also schedule call with me anytime to go through deals that you're working on marketing things, questions you got going on about a deal. We're here to help you. So how do you get signed up for that? Really easy. Just go to noteumbrella.com that's noteumbrella.com get signed up there for you 97amonth guys. Like I said, biggest bang for the buck of the nursery and we want seeds of the family. So let's get you signed up today. That's knownumbrella.com welcome to the no family everybody and thank you for always for listening. All right. Good morning everybody. Hey. Welcome to this episode special episode of the Note Closure show on a money Monday. We're excited to have you guys here today. Today I have to thank Donald Gal about this episode. He asked me to do a specific episode on a recent tape that we uploaded to our base camp group for our WC crew members, our monthly membership and our coaching students will upload tapes to them as we get them in. And this is another tape that they can cherry pick and take a look at. And Don's like hey, can you go through the reverse mortgage a little bit more in depth? So I thought I would do that this morning. So thanks Don for pushing that out there. And guys, if you, if you do send comments or have questions, I do like to answer them on the episodes, either video, audio or one form or fashion for you so that you walk away educated and more knowledgeable about what it is. Because the worst thing is if you've got a question and don't ask it, that's the dumbest question not to ask. Because if you've got the question, other people doing it, you guys should know by now I like answering your questions to help you make the most of what we're going. So anyway, so a little bit of background on this tape. This came in from one of our, our hedge fund connections. They buy non performing reverse mortgages in bulk. This is a tape and how it goes is I follow up with the seller at least once a month, sometimes twice a month, but usually once a month. And it's just a simple kind of hey, what do you have that you're looking to sell? This, this month or this quarter? Anyways, that's me. Okay, tell me what states you're looking at. Now what two things here is, is always funny is hedge funds and guys that sell stuff, they should have a list and they will occasionally send an email blast out with one note that they've got on their books they're trying to sell. And it can be a non performing first, it could be a non performing reverse mortgage. It varies but they don't necessarily every month is in conversation is a what month, what states are you looking for? So it's always like hey, what do you have on your books this quarter, this month? Here's the states that I'm looking at and that's, you know, my states are, you know, maybe not a big surprise for you. Texas, the Carolinas, you know, Michigan, Ohio, Indiana. I'll even look at Oklahoma, but Florida, Georgia, like I said, the Carolinas, Virginia, Alabama, Arkansas, just depends on what we're, you know, Tennessee. And that's what I'll send him and he'll send over a Tape of, you know, what they have available that they have multiple asset managers as this hedge fund. So sometimes I'll get stuff that I haven't seen before that somebody else is moving. But what's great about this, and I'll get into it, is that they're willing to give me their color kind of what do I need to make a bid on these and what pricing expectations do they have to have an offer submitted, which I really like that if they can be honest, hey, here's where their, their number is at. They know now they're not going to sell an asset below what their number is. You know, to break even. Here's a break even number and they're in, your number needs to come in a little bit above that depending on the situation, which I like that. I mean it's always great when you've got clear, clear pricing. Now some of the stuff, I don't like their pricing, I think it's too expensive. Others it's pretty decent. So I'll go through that in a second. But I just wanted to share, it's just that follow up on a regular basis. Follow up on a regular basis. Now they've been around for, I don't know, 20 years I've been buying from them. They've gone by a couple different names, but it's the same cast of characters over there and they're all quality individuals and easy to deal with. One of the great things that I love about most of their files that they have is they're going to provide usually a bpo, an updated title report and even on these reverse mortgages. Oftentimes there'll be an inspection report and there'll be other things like I can ask for the, you know, all the servicing notes, the legal notes where they got in the legal process. It's just a very transparent sales aspect and I absolutely love working with them. I wish I could buy more from them but sometimes I just don't like the price and that's just what it is. They, you know, they've got a number, they got to be it and that's totally fine. But I've probably bought, oh, probably closer to 50 notes from them over the fifth, you know, over the 16 years, you know. Yeah, I would say it's probably been about that. But I've known them, drank plenty of alcohol with them at different conferences in the past and just absolutely known him from a while. So anyway, so to give you a bit of an idea here, let me pull this up here and share my screen so you Guys can kind of see, let's see here. Do I have, let me pull up the actual map here that I have. So you bit of an idea. So a bit of a rundown. Now this is the stuff that they sent over and you can see this is what they had as far as states. Now they have other states but this is what my asset manager is managing it and they get a few others stuff. They got a couple out in Arizona, couple in Kansas. You can see one there on the border of Arkansas, Louisiana, a couple in Alabama, one a couple in Georgia and quite a few in, in God's way here in Florida. Now I have not been very bullish in Florida lately because of, of a couple things as you can imagine, right? Foreclosure, time frames, cost of repairs and then you also look at insurance costs, the cost to insure and stuff like this. Now I still ask for it because I still spend a lot of time in Florida. You know we still go to south Florida, we still go to central Florida. You know I like Florida. I mean I probably at some point I have bought houses out here and had quite a bit of stuff out here in the past and I think the numbers change. I think Florida is starting to hit some skids with days on market and things like that. So I think there's, you know, I think there's some opportunity to keep your eye out some things. Now I've bought stuff in Texas from them, I bought stuff in Indiana from them. It's been pretty decent stuff for the most part, but there is a lot of trash. Now what is a reverse mortgage? Let's first go into that, educate you on the difference in buying a reverse mortgage versus buying a traditional non performing mortgage. Okay. And buying a traditional first mortgage you're going to probably primarily be buying a first lien, right. And the borrower is either going to be living in it to be occupied or it's going to be vacant. Right. And your goal as a note investor is what is to most of the time buy that note at a non, that non performing note is a discount and get the borrower back on track, right. Getting, making payments work to get some reinstate the loan, bring some monthly payments on the front end for skin the game and then hold it for a period of time where you're getting oh at least a 15, 16 cash and cash return based on the payments that come in over the next three to ten years. Right. Now if they're not living in the house then you get you work to get a deed in lieu or foreclose and take the asset back. And either a, you're buying it at a price that makes sense enough that if you sell it at the auction, you're going to make a decent return. But if he doesn't sell at the auction, nobody outbids you as the, the bidding bank. You take the asset back now, now you own it. Now you, you can get more than what the legal balance is for it. Provide that it's, the value is actually there. Okay. Now the big thing that's different about a reverse mortgage is the borrower is deceased. Okay. Reverse mortgage is basically, it's like an annuity. People that have, they get reverse mortgages are usually going to be, God, I always get this wrong. Either 62 or 65 plus they need to have a lot of equity in their house. When they do convert from a first mortgage, traditional, where they're paying monthly to a reverse mortgage, they get a lump of cash or they'll get payments paid to them from the lender on a monthly basis. So it turns into like an annuity for them. Now what happens is that annuity payment or the lack of needing to make mortgage payments anymore, I mean it's not credit based. That's another thing that's nice about a reverse mortgage. If you got an elderly borrower who can qualify for one who's facing it, it might be a great way for them to go get refinance you out if you own the first lien, if you've bought the mortgage on it. Okay. But in these cases, this tape is 100% reverse mortgages where the borrowers weren't making payments and have to make, they didn't have to make payments and then lo and behold, they passed away. Now what happens in a reverse mortgage situation is the heirs, the family members have the first right to go back, pay off the mortgage or whatever is owed on the underlying balance. There is a mortgage payment associated with it that they basically you start adding on what a monthly payment would be. But it's basically the term of the loan now becomes, it matures and either the borrower's family needs to start making payments or they need to pay off the mortgage or they're going to foreclose it. Now what happens a lot of times is what always happens in a lot of cases with elderly borrowers. They may not have any heirs. Their heirs may be fighting, they may not have a will or these properties may go into probate, they may be outdated, they may sitting vacant for a period of time. Okay, you know, we've, we bought One beforehand where there was three kids. The guy used to live in Houston. He moved to New York to be with his son. When he passed away. He didn't have any will. So the two sister, the two daughters and his son were fighting over the property. We tried to get a dean. We got two of them to sign off on adid, but they didn't. So we just went ahead and foreclosed. And I was in Texas. That was easy to foreclose on. You know, the fastest foreclosure time frame on average across the country. But it just made sense. We were buying at a cheap enough price that we know if they didn't sign, we knew that we'd be able to foreclose pretty, pretty quickly. So you got to keep that in mind when you're buying these things. What's the foreclosure time frame? Has it started, or is it the beginning of the process or where you are in the process? And the great thing is the Cam and his team will allow me or they won't let me talk to the attorney. Well, actually, I've talked to the attorney before on some of these files, but they'll give me a straight up honest approach. Yeah, here's where it is. Here's what's missing. There's an assignment missing. We're waiting on this. Yada, yada, stuff like that. So I get this list in, and here's the map. I've batched Geomap that you can kind of see. And we'll dive more into it as we go through this later on. Okay. But I wanted to get. Let me pull up the spreadsheet now. So let me go into the Excel spreadsheet. Here we go. So here's a spreadsheet that he sent me. Okay. Is it. Let me save it all, actually, because it's not showing everything. So what happens, he sends me this spreadsheet and stuff that's all across the country. Okay. It's basically 31 reverse mortgages. And what's great is he'll give me a lockbox code too, on these, so I can actually go in and investigate these, drive by it or send somebody by to take a look at it if I want to. Now it gives me their loan number. And then he also. I'll ask him. He doesn't give this to me on the front end final. Ask him what his reserve price is. And I'll pick a few of these out and say, hey, can you give me the reverse price on these? Like, I asked him for the reverse price. Give me the reserve price, the ones in Florida. In Florida, I could drive by it or get somebody to take a look at it. If I see something else I have, you know, and he'll just tell me, hey, here's what the price is at. Here's where you need to be at or above to potentially get a successful bid. And some of these make sense, and all these just don't make any sense at all. Okay, so the borrower's name, the address, you know, city, state it's in. You can see Arizona, Kansas, Florida, Arkansas, Alabama, couple in Georgia, you know, and then a bunch in Florida. Well, I like God's waiting room. Even though there's some things in here I dislike about it, there's things I like about it quite a bit. Right. The property, county. Then he tells me what their BPO came in. Now, the bpo, he'll literally, if I ask, he will send me a copy of their bpo. He will send me a copy of their title report. He will send me a copy of their inspection. If they have got an interior inspection. So I can kind of see. Now, inspection reports, you might as well flip a coin. Some are great and some are downright ugly. All right? Some will show you good photos of the interior. Others will just. It'll be all blurry. It just depends on the agent. So I always like to try to send somebody by to take it if it's in Texas. I've driven two hours, three hours to go look at a property just because. Why not? I'll go take a look at it. Worst case, to get a lot of. Get a video that I can upload and have more carnal knowledge of that asset that I know exactly. If it needs a lot of work, it doesn't need a lot of work. Okay, so. So bpo, their total payoff. This is basically their estimated legal balance. Okay. Remember, it's legal balance. It's the amount the loan was made for on the reverse mortgage. And then you're going to have some outstanding payments, depending on how outstanding it's been. Now, some of these, like I said, haven't. There's been 20 years since the borrower passed away. Okay. So they've been fighting. Things have been fighting out with the estate or it's gone through probate. Some have been four years and 10 years. I've seen a whole variety of. Of these things take place. And you see a lot of these. So they give us, which is great. They give us the legal aspect of it. Okay. Pending first legal pre judgment. Pending first legal prejudgment you know, file pre judgment, you know, some of the stuff is pretty good. They also tell me the occupancy, okay, if it's vacant, 99 of these are going to be vacant. And then this one's a land lot, which I was kind of excited about because when I saw Orlando, I'm like, oh, I go there quite a bit, I can take a look at. But no, lo and behold, it's just a lot. It's not. There was a house that stood on there at some point, but it's, it's no longer there anymore. Okay, The P and I payments, the escrow payments, none of these are in there because they're not making payments. Right. They tell you the due date, so you, it kind of tells you how fast somebody passed away. The last payments were due. So like 20, 22, 20, 2021, 19, 15, 2015, it's about nine years. That, that one's in Duval county out Jacksonville on Atlantic Beach. So if you go back up your top, then they say last payment received, maturity date. These vault mature. The current upb, unpaid principal balance, deferred principal, deferred interest. I mean they do sell first liens too. Not because I just reverse mortgages, so all that stuff's going to be in there. But for these, they're basically vacant for the most part. Empty on this. I mean property type, mobile home, manufactured vacant land lots, beds, baths, square footage. You're built. If there's a garage, they'll throw that. But that's the information that I get. Okay, so the thing you got to keep in mind with these is that your goal on this is now, well, is it an asset that I can buy at a, at a value that, like I said, there's only really two exit strategies on this. One is foreclosing and getting it sold at the auction, or B, foreclosing, taking the asset back and making profit, fixing up and selling off. Okay, so number one, our number one strategy, which we usually like, the whole reperforming side, that's out the window, you don't even worry about that. Okay, so it goes now to, okay, what's the property look like? Does it, Is it decent? How bad a condition is it and what do they want for it? Okay. Is basically you're got a little bit longer process depending on what state it's in, the foreclosure process, you got to take a look at that. So that's where it comes down to running numbers and asking for the reserve bid price and then looking at the percentages what's the percentage of value? You know, these numbers right here. Now, I made the mistake. I thought he sent me the reserve bid on all of them. He didn't. He just sent me the ones in Florida because I asked for lockbox codes here in Florida. That's what I get. So before we start diving into this, does anybody have any questions? Do y' all understand where we're kind of going with this? Hey, Carmel, good to see you. Hey, Don. Hey, Mark. I have to thank Anna. Anna went out and looked at the Jacksonville, Florida ones, and I don't know if she's updated that. You know, I give her a base camp full. Let me see if she has. Give me one second. I think she might have gone and updated this. So if it gives a bit of an idea. Okay. Did she go back and change these or not? Maybe not. Let me refresh this. No, but you can kind of see. Okay, so let's look at some of these. Can you make sure you can see my screen? Yeah. Okay, so like, some of these are in Jacksonville. So, like, this one from the road doesn't look too bad. Right. And then this is the walkthrough. So let's look at the walkthrough video. Allow us to see it. So walking into it, you see these are, you know, outdated, but it's not in bad shape. This one does not look so bad. Just needs a re. You know, look at that older bathroom. Most of these have all been winterized. I mean, this one's down in Florida, so there's not a lot of bad cold. But still, it's just an outdated kitchen. Gotta love that old ceiling fan in the. The kitchen area. Right. The wood paneling. All right, let's see. I think this is another part of that. Yeah, the red brick house. I think this is part of the house as well. So this is a different one. So good. This is good. So you can see. And this one's a different house. It's a little bit. I guess that bathrooms looks a little bit newer. Yeah, I mean, it's not so bad. You gotta love that toilet. Tasty. But then you can see there's been holes in this thing where the copper's been ripped out, you know? Yeah. There oftentimes be a lot of stuff left in the houses, you know, windows busted out. So you gotta be careful. And that's why it's always important to put eyes on an asset. And that's what's great about these, is I can get the lockbox code to go look at it now. Yeah. You see windows busted. They left the bed in there. Hopefully that's not the person that died in there. On one time we had some. We were looking at a. A house up in Waco that was reverse mortgage where the bar passed away. And Scott, who's one of my students, he went by there. He actually caught a picture of a ghost, a shadow figure in his photo. Scared the out of him. So now look, a lot of times this will, you know, this will scare people off. Oh, I gotta do a rehab. In some cases the rehab maybe all cosmetic, you know, like that wall. Okay. There's a lot of stuff that people can't see behind. You had to change out some glass. But after that it's not really that that. I mean that doesn't look so bad there. You know, it could be a whole lot worse. Let's look at another one. See, you know, let's. I got a picture of this one. This is walking into the foreign. It's really sad because you see how people like you know, people have gone through these houses, grab stuff. Small kitchen, something that's built on there. You can see the winterization report. Inspection report by usually hud because that's what a lot of these reverse mortgages will be. Will be hud. HUD mortgages. So that looks. Yeah, that's the garage I guess garage slash. Surprised that's still in there. A lot of times we'll see a water heater gone. I wish these videos are a little bit longer. But hey, I'm not going to complain. I did not have to go there to do it. And let's see, we have another video. Yeah, here's another video of another cry hall closet. I don't know what's going on. I mean, that's fine. See the one that looks like it's in pretty good shape. Don't know what the exterior looks like. Door off a hinge is not a big deal. Air conditioner furnaces there, that's a good bonus. Sometimes they've been ripped out. But those look like it's there which is great. I remember this is vacant property. The bank has a right to go and secure the property. So same thing when you become this. Yeah bank you can go insecure. So this one looks pretty good. Like it's relatively clean based on what we can see on the minute video there. So what are your thoughts and comments about these so far? Everybody. I mean they're not so bad, right? Maybe you should go back and label them for me and I can know exactly which ones they are. So I mean, some of them are scary and then of course some of them are just pretty decent. And she said she was able to go buy like four in Jacksonville. Three were okay. One was pretty bad. It was salvageable. Now, looking at the interior. Yeah. Don says they're better than tax deed properties yet often. So. Yes. Okay. Yes. So let's look at these. Let's start looking at the numbers here. So, and so you got to be very specific, obviously taking a look at what do the numbers make sense? And then, then you look at the inspection reports. Okay. Or I'll ask some things. Like I saw one on here had 26 acres or 24.75 acres attached to it. And I was like, oh, that's a pretty decent price for 24 acres. Yes. It's in Florida, so it's going to be a little bit woody and humid, but still the price point for that was not too bad if you could pick it up at a decent price. So let's go through here and start running our numbers. Shall we do a little bit of that stuff so we can kind of highlight the ones. So we're just going to go ahead and get rid of the blanks. We can always go back and ask. I can always go back and ask them. So if you see something on this thing you want to make an offer on, let me know. I'm glad to reach out to find out what the reserve price and getting information I can for you. Okay, so if we start looking at these, we want to look probably the lower the percentage of BPOs versus payoffs. That's the thing. If you look at the percentage versus payoff, those are some pretty low ass payoffs. Okay, so let's look at that number. Let's calculate this number. So let's go in here. Okay. Come on. I'm going to insert two rows in here so we know roughly what that number is going to be. Okay, so percentage of bayoff, we're going to say dollar amount, dollar equity. So if they're looking at what they want. So if you're going to take BPO minus the reserve, that's a dollar amount and then this $1 equity. So this is going to be your payoff minus the reserve. Oh, what did it happen there? Escape. Okay, let's do this again. So it's equal to the reserve, I'm sorry, the total payoff minus what they want for the thing. So you can see. Okay, there we go. That's more like it. Okay, so now we know this, like this one. So they want 110. For this one, it's worth 160. They owe 153. So that's a pretty safe one that if you buy it at 110, you're going to foreclose at the 153 and a little bit of change, man, how long it takes you to foreclose. And there's not really, there's not really a ton of equity there. All right, there's dollar amount of. Let's see, let's see profit. Let's let me change this from equity because that's not really accurate. Profit above payoff. And this is going to be your profit above, below BPO. All right, so you, you know, buy it at 110, it's worth 160. There's about a fifty thousand dollar profit margin. Hopefully it's in good shape. Right. If not, if it's not in good shape, then we have an issue. Okay. Now if you buy it, you're probably remembering there's. If you sell the auction, you'd make about 43,000. That's not so bad, depending on where that one's located at. So let's run these numbers all the rest of the way down. Okay. Now what you want to do is look at the difference here. So some of these, the payoffs are going to be higher than the actual BPOs. Right? So let's do. I didn't do one other thing here. So let's do. I know what we need to do. Let's do insert equity amount. And that is going to be really easy to. We're going to go over and do the BPO minus the legal for total payoff. Okay. So that you know if it's a positive negative number. So if it's a negative number, there's negative equity, means they owe more than the property's worth. That works in your favor if you want to take foreclose and take it back. Okay. Okay. So you see most of these have negative equity, right? So like this one down here, reserves 108. The, the value is 145. Total payoffs 350. Right. I mean BPOs. I mean BP was 145. That, yeah. You, you listed the total payoff amount. You're gonna get this right? You're gonna take this property back. So like this one. Okay, so let me give you example. This one, 1348 Sleepy Hollow Drive, Mariana, Florida. Let's just take this in Calhoun county. This is the one I was talking about. This is the one that's got that like the 26 acres of land or 25 acres of them, it's out in the middle of boonies. Right. You're not going to find any photos of it. Okay. Even if you do a layered look to it. There you go. All right, so it's this house. Now let's see here. I believe he shared the BPO on this. Let me look at. Hang on a second here. Yeah. Okay, so let me show. So on this one, since it's. You're not going to find anything, you want to ask for the inspection report. So I asked for the inspection report and here's what it looks like. And it's not really exciting. I mean, it tells you the information about the property. Okay. This went out there October of last year. So it's about a seven month old. Personal property president. Yeah. Required signs post and visited. Yes. Is garage door property secured? Yes. No pool? No. Lockbox? Yes. No. Sign sheet posted? Yes. Property winterized? No. Property interior in broom swept condition? No. So you can see kind of a lot of that information that you'd ask about. Is there a furnace? Not available. Is there an AC unit? Not available. Is there a hot water heater? Not available or. They didn't look at it. So you got to flip through these photos. Now, this is why it's scary. Because these. Look how close to some of these photos are and how further back they are. It's hard to tell. You know, get a realtor to take good photos is hard. So you can see. This looks like this is the living room area. All right. Door, green door. Hard to tell, but it looks like it's just got a lot of stuff in it, you know, I don't know what this picture is. It's just a horrible. They don't really have a good picture of the house, you know. What the heck is he teaching? Picture of the sky, picture of the roof. I don't know what's going on with this stuff. Flower bed was rotted there. Okay. I can't tell. Is that a gate that's busted over there or a pen. Right. So personal property. Okay. So you got the back side of the house. Need some paint. This has a. There's official address. You know, it's kind of a normal home built in that time. It looks like that's the garage with a bunch of junk in it. Okay. Or a shed. Yeah. It's all. Yeah, it's the same picture of the garage. This guy's got so many pictures of the garage. So there's, there's. What's concerning right there. Looking at that electrical box, there might not be an air conditioner attached to it. And you may not have. Look how old that box is or the wires. That doesn't look. Look safe. Right. This is a second story. Oh, this is a deck. It goes up the deck. It looks like the deck's caved in on that. Yeah, that's what that is. Well, it's old and there was a storm that went through there, so it got the debt. This is not the roof. This is a deck that walks around the wraparound porch. Okay. But the rest of the house looks pretty decent. You can see that kind of falling through there. It needs some tlc. Right? There's no doubt. This needs some tlc. The thing that interests me on this one is a 26 acres. All right. At 25.75, there's about four grand back taxes because you can still see. Now we move to the interior. Man. So some of these drawers have just been dumped because people have been going through it. It looks like that's the bathroom. You know, got ceramic tile. Didn't look so bad there. Get this big built in vanity corner shelves. Look at that flowery couch bay window. I still want somebody go take a look at. Yeah, still the clothes in the house. That's always the creepy thing. Recliners. There's a nice running thing there for you. There you go. Treadmill kitchen. There you go. So that's where you gotta take a look at this. This kitchen doesn't look like it's too bad. It's a lot of clutter. But I can't tell if that is. That's granite. Oh, that's just. I think it's just style. It's just a regular countertop. There's some coffee for you. Air filter. This is going upstairs. Can't tell it's the kitchen, I guess, anyway. So you can see there's a lot of jump to. It's not a really good. There are not a lot of really good photos. Tell you what kind of. If it's in good shape, like that's why I like having a video. You can see if the holes are punched into it. You get a lot better aspect of it. But what do you. What do you think about this? If we go back over here, can we get a photo? Let me pull something else up here. Here's the bpo. So there you go. Now the BP on this, they don't have it accurate. They say it's a mobile home. Okay. But they say values at about 100. Somewhere around about 131 to 145 if you wait for 90 days. Land value is only 34,000. So this BPO is not accurate because they're not figuring in the actual acreage. They only say 10 acre lot size. Well, it's much bigger than that. Okay. I looked at the county. It's. It's 25 acres. That's what got me real excited about this. So let's see if we can't get some decent photos from the. The bpo. Once again, those are the pictures. They just do a shitty job of putting the wrong spacing photos. Okay. That's the comps. That's not what we're looking for. Don't care about comps. There's the aerial view of it. You can kind of sale one, sale two, sale three. So there's not a lot of comps on this one. Being kind of a rural okay I guess anymore. No, that's the bpo. Not a very good BPO because it's not anywhere close. This is a much. It's a bigger house than these single one ones. Okay. So we go back up here and this says. Give me a second here. They say mobile home. This is not a mobile home. This two story house. Yeah, this is just about worthless. Built in 1980. Can't even see that as. Yeah, so but you get this stuff. All right. And last thing that they provided to me was the title report. Pre foreclosure report. 1348 Sleepy Hollow Drive. Mariana, great app. They said basically closed end. Right. Fixed home, second mortgage lender mortgage MERs for HUD. Usually that gets white. That's gonna get wiped out before closing the first one. So the vesting issue. You can see Richard K. Floyd died. Date of death was December 27, 1999. So you can see that they've been passed away for 24 years. Okay. And that Richard Floyd. Oh, sorry. That Sheila Lee Daniels K. Has been appointed as the personal rep. Okay. So the incapacitated person passed away. All right. Taxes due. Yeah. There's the assignment of mortgage. Not a big deal list penance was filed. Yeah. So it's. That's a normal HUD report there for you on that pre foreclosure report. So basically Sheila K. Daniels. Let's see if there's anything in there. There's tax information. Yeah. Backtag about 2300 bucks. Not that big. Why there's not more? I don't know. I guess the tax has been paid for a while so I'm always going to have a. You see this shows the warranty deed sold that was pulled up. So it's not really that big a deal on that aspect. So. But that's the good information to get, right? Usually it's got good pictures. Well, 50. 50. It's got good pictures, but you can still get a rough idea we'll take a look at. So let's go back over here to our spreadsheet. Okay. Now does it make sense on this one? If I want to, it's worth 145, as they say, payoff totals 350. If I can buy this for 108. I mean if I want to own 25 acres, 26 acres in Calhoun county. Yeah, that makes sense for me to buy that all day long because I'm basically buying it. 31% of payoff. I know I'm going to foreclose on this. Okay, But I'm buying it $0.74 on the dollar of their BPO value. I think the BPO is low. Okay, but that's a possibility for me now. That's as is. I mean it needs some work. We all know it needs some work. I don't know how much work it needs. I need to have somebody take a look at it. It's, you know, I might have to drive or jump on a plane, fly to the panhandle of Florida to take a look at or get somebody better to drive out and take a look at it, do a walk around video. So let's look at first of all where the, the percentage of BPOs below 70% and the payoff is, is roughly at that too. It's either the payoff is below that. So if you buying this, you're going to get a good chunk of money if you, if it's sold at the auction. Okay. So like all these are below. They should all, you know, anything that's above really 70 cents on the dollar, you know, profit below, profit above payoff. That's what you're looking at here. So yeah, they think it's, you know, payoff is, is great, but that's not necessarily. I'm not gonna get the full payoff on these. You're not going to see that profit unless it's sold at the auction. And that's where this comes in. So they want like this one is 110 give you why this doesn't make sense. They want 69 cents on the dollar. Okay, it's worth 160. All right. Or I'm sorry, it's worth, they say at 150. 160 the payoffs. 153. You'd be buying this at 110 or at 69 cents a dollar. So is making 43. Sorry, 33. Yeah, 43,000 worthwhile on this one. Well, let's take a look, see what we can find out about this one. This is in Gainesville. And this is a picture taken from August of 2023. And it doesn't look like it's too bad. The front shrubs look pretty bad. Right. Roof is a little old. Let's see if we can't go over here. But Gainesville, it's kind of normal. Houses the neighbors, Right. You know, it doesn't look too bad. It could be good. It could be bad. I don't know. We need to get some information. I get something to drive by that if it's in decent shape, great. But here's the thing they're looking back at too, is going back to our legal aspect of things in these. They're all basically just starting. They're just starting the process. Okay, so pending first legal, that's the big thing. As of April 1st, they're all like. Now the pre judgment ones, that might be a little better one. Prejudgment. Prejudgments. Let's look at those. Let's just filter our list for prejudgments. What happened there? All right, so vacant. Vacant lot. I'm not really worried about the vacant lot. Let's get rid of the vacant lots. All right, so now if we look at the numbers on here, like Panama City. Let's look at it. What does this look like? 5,120 Bay County, Panama City, Florida. Does this? Oh, yeah. I looked at this property. I looked at this one. So it's this little property on about an acre, three acres, maybe. This is from 2019. Okay, there we go. That's a better view. They got a greenhouse over here. But this, you know, I mean, it's, you know, small little house. I mean, they've got some pride of ownership. They got the. The grass is clean. They pulled this stuff out to the road to get rid of it, you know. Do you want to own a property in Panama City? Maybe not. They figured that values at 150. What do they want for this one? They want. They want 68,000 for this one. Okay, 68 payoff is 174. BPO is 150. So that one's got quite a chunk of change. 82,000, right? Yeah, yeah, yeah. 150 minus the 68. Yeah. So that One's not so bad if it's decent. The true values, right? Yeah, depending what kind of condition is. And I haven't gotten anything on that one. So I don't know the interior. I've got the interior inspection report. You know, let's look at another thing on this one. Let's go back here to our maps. 5122 Highway. Yeah, there we go. Yeah. Three bedroom, one bath, 1040 square foot. It's on just over an acre. Built in 1950. Single family. So it's an older home. So that one, I mean, depending on the days on the market, you know, they owe a couple grand in back taxes. Not that big a deal. Do one other thing. Let's see where is on the map. So it's right across from Lucky's. Bingo. Yeah, see? So you start getting into. Here you go start getting into the city here. So it's just in the outskirts of the town. Well, this is old photos, 2007. I don't know how that's Callaway, Florida. So it might not be a very big city. So as you go into the city, you can kind of see, okay, it's got some life. So then you'd want to talk, if you like that number and it's in a decent spot. That's, you know, that's not a bad deal there. That might not be bad to. For if you had to foreclose because it's at the best profit margin. Right. This one might make sense to do if you like that. If you don't buy in that area, don't worry about it. It also you got to look at what's the insurance costs be and how long is it till you foreclose. So that's the thing I would be asking. Hey, I see prejudgment. Can you tell me about where you are in the foreclosure process? Does it make sense? Does it not make sense? Okay, now let's look at this other one here. The reserve on this one is 105. This one is located where in McAlpin, Florida. I don't know where that's located. So let's look at this. Well, hey, Don, you want to buy one in McAlpin, Florida? Your name, your city that's named after you. Donald. All right, let's see what this one is at. Who wouldn't want to buy something Carson City? Yeah, I'd buy something Carson. So just say the hell I did. All right, this one's out in the boonies and yeah, I know it needs an End. Yeah, I know it needs an E, but still. All right, can we get anything? This is probably. Yeah, probably not maps, so. No, no maps. Okay, so let's go back here. So we don't have any maps. So this is 1670. Let's see if we can see any images. 1627713 Ninth Drive now. So it's a little remote. Let's go back here one more time. So this is a 2137 square foot house, probably three bedroom, two bath. Okay, any information on how many acres it's on? It's a mobile system. Mobile home, Four acres. So four acres, Galpin, Florida. Looks like somebody tried to sell this at 1.16277. Okay, so I don't know what kind of condition that's in. It's a little remote. That's the thing I keep in mind, it's a little remote. But if you bought it at the 110, is that what they wanted? Right? Yeah, 105. Payoff is, totals 180. If you sold it at 180 or 170, that's still a pretty decent profit margin of 40, $50,000 after taxes, provided it's in good condition. Now. I. No idea. Let's look at the map on this thing here. That's the one. So you can see that's the one in Panama City. We're looking at Callaway. It's near the coast. All right, let's look to see a little bit closer on that one. Yeah, see, you're only a couple minutes away from that one. That's on an acre that we were talking about a second ago. Yeah, there it is right there. Alford, Mariana, Quincy, Tallahassee. There you go. This is the one we're just talking about. McAlpin. Okay, so this one's a little obviously further out. That's probably that four. Good track right there. There you go. That's probably. That's it right there. I guess that's it here. 2100 square foot mobile home. So you're kind of by yourself. Maybe it makes sense, maybe it doesn't. You know, I like to go look at, you know, if we can find something in the bigger cities a little bit easier, you know, so something so remote. Let's go back over here and change some of the stuff up. Okay, so let's get rid of these to everyone. All right, so now let's look at some of these. That might make a little more sense. So Gainesville, Leesburg, Alford. Let's get rid of some of These cities we don't recognize. So let's just focus on the ones like the Phoenix Springs. I don't know if that is Jacksonville. We already looked at the Palm City. Let's look at Sanford because that's near Florida. That's near Orlando. Let's just look at those. Okay, so now these are probably the better seven to look at. Okay, now let's look at the percentage of these. Okay, now this one, they want you buying 87 of the BPO. They want 130 for it. BPO is 150. Payoff is 151. That's just too skinny. That's less. That's a 20 grand for that. That's a big no right off the bat because it just doesn't make any sense to foreclose. So take more than that. Right? What's it look like? Yeah, this little. I looked at this one here. Yeah, I mean, it's not a bad looking home, but it's just too skinny. That's too skinny a deal. That's from five years ago. But 20 grand, it doesn't. That doesn't give you any room whatsoever. Okay. What you have to do is look at. It's like this one here. It's another. This is at 29 grand. They want 66 for this one. EPO is 95 paths, 105. This is also one in Jacksonville. 4155 Contanga Drive. I think this one is in a rougher area. Or is this the mobile home by itself? I can't remember. Yeah, it's that little pink one. This is a little. We looked at this one. Yeah, I think Anna had a video of it. So this is the little pink out. I mean, not bad. I mean it's kind of common down there. This is from January of last year. So just over a year old, but it needs some work. But it's. Once again, that's almost what I said it was too skinny. 66 and worth 95. Yeah. So it's $29,000 before you're legal. And that's just too skinny. Okay, let's go down here. There are. So let's look at this 58. They want 46. Is this the lot? So BP on this is 80. Payoff is 292. Where the heck is this? So you got it? Yeah. So this is a mobile home, 1651 Village Gain Drive. Yeah, this is from five years ago. Okay. So it's not too bad looking from that. But you don't know what kind of condition I Mean, it's all. It's pretty normal throughout that part of Jacksonville, which is okay. But once again, you don't know. This is why you need to know. Condition more so than anything else. Okay. Condition where they got in the foreclosure process. Let's look at one more here. So this one is. They want 98. This one is 98. BPO is 142. Payoff totals 211 in Sanford. That's near me here. Yeah, it's this little small house right next to a church. It might not be bad. Maybe broken windows there. They're all kind of that same style. Right. So that might not be a bad one there. If it's a depend on what kind of interior condition it's in. Okay, let's look at one more little fast. That's a possibility. Because look at this one. If you bought this one and it's 142. So if you really do want to take it back, great. You pay 98 for it. There's $52,000 there. Before close. Take it back. You sell at the auction. That's going to be a nice chunk without having to do any work. Right. And then let's go to. Let's go up to. Where's this one? 144. Where do we really look at this one? Oh, no, Barkwood. Okay, so 144 is what they want. 216 and 2 39. Okay. So there you go. They all morning if you want to take it back. Great. So this one might not be bad. Yeah, that's that red house we looked at. So it might need some work. It might not. This is from two. Two and a half years ago. Two third years ago. So 28 months ago. And if we go back here. Let's take it back. It looks like. Oh, we got some photos here. There you go. Look at that. So this is what it looked like. That's always nice when you find a listing of photos 248. Don't know if it's in. There's the back there. Is that a hot tub or is that. I don't know. Yeah, I think we looked at that. It had a lot of stuff in it, but it could be a decent looking house depending on what kind of current condition it is. Yeah, so we tried to sell it. There we go. All right. So that one is probably our most desirable one. We go back to this one. Let's pull that up. So if we could pick this one up at the 144, it might be a pretty Decent. Yeah, depending on how much work it needs. Okay. Now you gotta look at days on market, what's going on that area as well too for you. All right. But that's, you know, that's what you're doing. You're looking at these. You're much more property intensive. It sucks that you don't have the, you know, the cash flow potential possibility. But then you look at rentals, look at the rental market there. Days on market. Some of these might make more sense to hold it for a period of time versus trying to sell it, if you're interested in that. All right, any questions, any comments, concerns before I let you go for the day, ladies and gentlemen. But that's the thing you get into looking at these. It's a matter of going through a lot of that stuff back and forth. Don asked, do you usually get their reverse mortgage amount when looking at reverse mortgage notes? If not, how do you drive derive your bid price? So on the. Yeah, they're going to tell you they should provide the payoff amount. And though the reserve amount, it all depends on the seller. I mean, like if you're buying, like let's, let's just look at David Polio sn. He's marketed for you. He doesn't give you the reserve price. This seller does. And I asked him. And that's the thing you asked on what are you looking for? Give me a price whether it's. So I'm not wasting my time. What kind of conditions in. And that's. These guys realize that not all these properties in good condition. So it's better to have a reserve price. Makes sure it makes sense or not. Okay. If not, then I'm gonna go at 60% of the value. Probably is what I'll probably look at. Or 60 to 80% of the payoff, depending on what that number is. It's got to be in good shape. Obviously, if it's not in good shape and you order a BPO and it comes back in bad condition, then you can cancel. Okay. But probably 70% of the legal, you know, balance it goes into looking at. Where is that? These are in Florida. So I'm not going to really want to be above 70%. I'm going to find out where they're at in the legal process. So that's the thing. It's more of a foreclosure process. What's it going to cost me to foreclose? Does it cost me for insurance? What's it going to cost me for repairs? It's almost like you're old Mao offering, you know, 70% of value minus repairs kind of thing. Okay. And then letting them bid, let them counter you back on a lot of that stuff that. Does that make sense for you, Don? I think it does. Good stuff. All right, guys and gals, well, that's going to wrap it up for this episode. Hopefully, it was valuable for you. If you have questions, let me know. I'm gonna be a little bit limited this week on responses, but I can. Or shoot me a text message, and I'll be glad to answer anything I can for you. All right. Thanks again so much. Have a great day. Stay out of trouble, and we'll see you guys at the top, everybody. Bye.