Cross post from /r/ finance: Non-performing note financing.
Does anyone have experience with this? I would like to attend an auction for a Miami property that I believe is a great bargain. I have to acquire the note then foreclose on the current borrowers who are not paying, then refinance for around the current loan balance (and getting all of my original investment back with practically free cash flow) and hold the asset forever (no real need to sell). Anyways, that's not the root of my issue.

I need to get financing for a big chunk of the potential total investment cost, but I really don't know where to go in this current market. There are plenty of sites offering cash up front, but I don't know which places are legit.

I expect a final closing price of around $1 million + legal fees (this is the absolute maximum I'd be willing to invest in this property) and any secondary issues with title. Of course, I am looking to minimize my liability(personal cash investment). We have some assets in cash and real estate. We need to invest the cash into some income producing assets, and I feel that this property will get me in the right direction. It's going to sell for roughly 20% below it's 2004 price/appraisal (pre bubble) and it's generating almost triple the income from that time. To insure the success rate of this purchase, I assumed worst case estimates here, where I am using 2004 numbers as my income numbers, and an only 10% discount from the total remaining note balance as my total investment cost.

Where do I get the funding I need? I need a reputable source that can provide the funding quickly and with flexible rates. What are your experiences with using these sources of funding (terms, requirements of eligibility and payment flexibility). I have 2 weeks to come up with funding before the auction, so time is of the essence.

[{"id": "c5bw88j", "text": "Anyone?", "replies": [], "depth": 1}, {"id": "c5q76qw", "text": "I have never heard of any traditional lenders offering a note against a note, which is what this would be. You would have to go with a hard money lender if you can find one with that much cash on hand, or possibly a syndication of hard lenders or a mezzanine loan if you have the time and expertise to put this together.\n\nLooks like more than 2 weeks have passed since your post. What happened?", "replies": [{"id": "c5qcc2z", "text": "Well, we got the money all lined up, but an unknown bidder decided to purchase the note ABOVE PAR. I was floored. We are now looking into other opportunities.", "replies": [{"id": "c5qt214", "text": "Out of curiosity, how did you line up the funding? Do you know wealthy people who were willing to back it or did you use institutional money?\n", "replies": [{"id": "c5uzqu7", "text": "I wish I have institutional money. I'm going to have to build a pretty strong track record before I can get that kind of money.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]