Thinking about buying a cheap junior lien or a 5th position real estate note? Think twice before you put your money at risk! In this public service announcement episode of The Note Closers Show, host Scott Carson breaks down why investing in junior liens—especially 3rd, 4th, 5th, or 6th position notes—is one of the fastest ways to get wiped out in real estate.

Scott shares real-world horror stories from the trail, including how an investor in Los Angeles got suckered into a 6th lien position behind $900,000 of underlying debt, and how an overconfident auction bidder dropped $15,000 on a 2nd lien without checking title—leaving him responsible for a $180,000 senior mortgage. Scott explains the foreclosure mechanics of senior vs. junior debt, why bankruptcy courts strip encumbered junior liens, and why focusing exclusively on non-performing first liens is the safest, most profitable strategy for real estate investors.

Key Topics Covered:

• The 5th & 6th Lien Trap: Why junior liens marketed for "pennies on the dollar" are often completely uncollateralized and worthless.
• Real-World Case Study (LA Property): How a homeowner stacked six separate $100,000 liens against $1M in equity, leaving junior lenders with zero recovery protection.
• Foreclosure Auction Misconceptions: Why buying a junior lien at auction does NOT wipe out the 1st mortgage and leaves you liable for underlying payments.
• Lien Stripping in Bankruptcy: How Chapter 13 bankruptcy courts strip encumbered junior liens when property values dip below senior debt balances.
• The Importance of Title Work: Why you must ALWAYS pull title reports, check for senior mortgages, and verify recorded documents before closing any deal.
• First Liens as the Safe Alternative: Why first-lien note buyers are protected by the physical property, title priority, and insurance coverage.

Connect & Scale Your Portfolio:

• Book a 1-on-1 Strategy Call with Scott: talkwithscottcarson.com
• Learn Note Buying Fundamentals: weclosenotes.com
• Register for the Virtual Note Buying Workshop: notebuyingfordummies.com

Stop chasing low-quality, high-risk junior debt! Subscribe, rate, review, and share this episode with an investor who needs a reality check on title due diligence!

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When evaluating seasoned non-performing notes, thorough due diligence is the ultimate line of defense. Welcome back to The Note Closers Show! In this episode, host Scott Carson breaks down a fascinating case study involving a defaulted Debt Service Coverage Ratio (DSCR) investor loan in Houston, Texas. What initially appeared to be a standard non-performing note with an underwater balance quickly turned into a masterclass in uncovering potential deed fraud and unauthorized subject-to transfers.

Scott walks you step-by-step through the property metrics, initial DSCR valuation drops, and the exact red flags he spotted while auditing county tax and deed records. Learn how to examine suspicious general warranty deeds, detect copy-pasted PDF signatures, spot out-of-state notary discrepancies, and identify improper legal language like lis pendens in non-judicial foreclosure states like Texas. Plus, Scott outlines his exact bidding strategy—offering $194,000 (65% of as-is value) on a $300,000 property—and details how to leverage cash-for-keys or legal pressure to resolve title defects and capture a projected 25% annualized return.

Key Topics Covered:

• DSCR Note Profile: A 4-bedroom, 2-bath, 1,518 sq. ft. Houston property refinanced into a DSCR investor loan in late 2025 at $395,000, now sitting 8–9 months delinquent.
• Market Correction Math: Analyzing value drops from $395,000 down to a realistic $298,000–$300,000 market value against an unpaid principal balance (UPB) of $293,000.
• Uncovering Potential Deed Fraud: How auditing Harris County tax and deed records revealed a suspicious transfer to a new LLC using copy-pasted signatures and out-of-state Florida notary stamps.
• Red Flags in Title Records: Identifying improper legal terms (such as Florida lis pendens clauses used in Texas filings) and handling unauthorized "subject-to" takeovers.
• 65% As-Is Bidding Strategy: Why Scott capped his bid at $194,000 (~65% of current market value) rather than bidding off the inflated $320,000 legal balance.
• Resolution & Exit Strategies: Budgeting $5,000 for attorney/foreclosure costs, offering cash-for-keys, or completing a non-judicial foreclosure to net a projected $52,000 profit (25% ROI).

Connect & Learn More:

• Book a 1-on-1 Strategy Call with Scott: talkwithscottcarson.com
• Register for the Virtual Note Buying Workshop: notebuyingfordummies.com
• Join the WCN Membership Community: noteumbrella.com

Don't let title complications scare you away from high-yield deals—learn how to spot the red flags and profit from problem properties! Subscribe, rate, and share this episode today!

Watch the Original VIDEO HERE!

Got Questions? Book a Call With Scott HERE!

Connect with Scott on LinkedIn here!

Use Scott's AI Clone HERE!

Looking for real-world case studies on non-performing notes with massive equity? Welcome back to The Note Closers Show! In this episode, host Scott Carson breaks down a high-equity, low-LTV non-performing note deal in Conroe, Texas. Scott walks you through the initial evaluation, bidding numbers, foreclosure returns, and the exact exit strategies considered for this $90,000 cash-out refi first lien.

Scott breaks down the math on a 四-bedroom, 3,600 sq. ft. home valued around $500,000 with an unpaid principal balance under $89,000 (roughly 18% LTV). He explains why an 80% UPB bid ($71,100) made mathematical sense, how foreclosure or hard-money refinance options would yield a 33%+ annualized return, and what happens to your yield if a borrower files Chapter 13 bankruptcy or enters a loan modification. Scott also shares why he ultimately lost the deal to a whole-tape buyer and outlines the key lessons every investor should know when bidding on multi-state asset pools.

Key Topics Covered:

• Conroe, Texas Asset Profile: A four-bedroom, five-bath, 3,600 sq. ft. property valued near $500,000 with an Unpaid Principal Balance (UPB) of just $88,900 (~18% LTV).
• Loan Details: 30-year cash-out refi first lien at a 6.625% interest rate with monthly payments under $600, sitting 12 months delinquent.
• Bidding Strategy at 80% UPB: Offering $71,100 for the note to target a $24,000 gross foreclosure profit, creating an annualized return above 33% within 90 to 120 days.
• Chapter 13 Bankruptcy Math: Analyzing the conservative downside risk if a borrower files a 5-year repayment plan—yielding an $8,352 annual cash flow (~11.76% ROI).
• Single Asset vs. Whole Tape Bids: Why seller preference for full-pool buyers led to a whole-tape bid at 85% UPB across 7 states, including slow-foreclosure jurisdictions like New York, Maryland, and Pennsylvania.
• MLS & Foreclosure Signals: Tracking active listings on HAR/Zillow and recognizing when a pulled listing indicates loan modifications, forbearance agreements, or impending auction dates.

Connect & Learn More:

• Book a 1-on-1 Strategy Call with Scott: talkwithscottcarson.com
• Register for the Virtual Note Buying Workshop: notebuyingfordummies.com
• Join the WCN Membership Community: noteumbrella.com

Don't miss out on valuable market breakdown episodes—subscribe, rate, review, and share this video with a fellow investor today!

Watch the Original VIDEO HERE!

Got Questions? Book a Call With Scott HERE!

Connect with Scott on LinkedIn here!

Use Scott's AI Clone HERE!