A nine-month workout became 26 months, then I sold the note at a loss

The prior filings check is the sentence I'm writing down. Is that something you can pull yourself from the federal docket, or do you have someone do it? I'd rather know the process before I ever have money at risk.

On the build side, 26 months of a house sitting with an owner who can't pay taxes usually means deferred maintenance you never saw. Did the fund that bought your note at $34,000 do an interior inspection, or were they pricing off the same drive-by you had?

Reading this as a land person, the thing that jumps out is that your $118,000 collateral value never got tested. You paid for an asset and then spent two years unable to touch it. That's a different risk than the one I'd have expected going in.

So the force-placed insurance, you were paying to insure a house you didn't own and couldn't enter? I'm new to this side and that piece confuses me.

I'd argue your real mistake was earlier than the timeline. At $37,500 on $118,000 you had a 3x cushion on paper and it did nothing for you, because a cushion only pays out if you can reach the collateral. Price on how fast you can get to it, not on the ratio. I do fast thin deals and I've learned that duration is the whole risk.

Flint, that reads a bit clean to me. Ledger's cushion is exactly why he only lost $6,200 instead of $25,000, since it's what let a fund pay $34,000 for a stayed file. The cushion capped the loss even though it didn't produce the win.

Near miss of mine, smaller. Bought one note, borrower stopped answering, and I discovered the seller had never recorded the assignment out of the originator's successor. Six weeks and $1,900 in legal to get a corrective assignment recorded before we could file anything, and recording requirements for that vary state to state. Cheap compared to your 26 months, but the same lesson about checking what the seller says versus what the county shows.

Genuine beginner question. When you say you sold the note to a fund, is there a normal place that happens, or do you just call people you know?

Two years of advancing taxes and insurance on a property with an occupant you have no relationship with is the part I'd flag for anyone reading. On the management side that's the definition of cost with no control. Did you ever get an interior look, or was every inspection exterior only?

The number I want is your monthly carry. Roughly $2,900 plus $1,100 plus servicing spread over 26 months is around $250 a month before legal. If someone models a nine-month workout, that carry looks like noise. At 26 months it's the deal. I'd rather see this posted as a carry problem than a bankruptcy problem, because the next one will get slow for some other reason.

Canton's version is the one I understand. The event was a filing, and the thing that hurt was every month the meter kept running.

One document point. When you sold at month 26, did you assign the proof of claim and the plan position along with the note, and did the buyer require you to warrant the arrears figure? That representation is where a seller in your position can end up with a liability after the wire clears, and it's worth having counsel read the assignment before you sign it. Your loss is $6,200 today. It should stay $6,200.