We purchased a defaulted first position note directly from the lender at 60% of face value. The Property and Note had been in litigation for several years including a borrower bankruptcy proceeding.
We recognized that because of the years of prior litigation, the borrower and litigation proceedings had likely run their course and that the pending foreclosure auction would likely not be challenged.
We closed escrow on the note purchase the day before the scheduled foreclosure auction, attended the auction and credit bid against other bidders in order to gain ownership and control of the property.
We then executed a full building and landscaping face-lift and renovation, hired a new leasing team and achieved 100% occupancy from 50% in 9 months. The property has since been valued at more than double the purchase price and we refinanced 95% of the equity out of the building with long-term fixed rate, assumable debt.