Foreclosure completed and the property is yours again (REO)? NoteHarbor is the rare tool that holds both halves of that story — the note that ended and the rental that begins. The "Property back in hand? Convert to rental" button appears on the loan's Foreclosure tab once the case is closed out.
What the guided step does
- Confirms the property and flips it into the Rentals workspace.
- Pre-fills a carrying-basis worksheet from what's already recorded:
- the loan's unpaid principal balance,
- foreclosure costs — every Receipt/Cost timeline entry plus the close-out final fees (court, attorney, other),
- escrow advances — money you fronted for taxes/insurance (a negative escrow balance).
- Shows the math and lets you confirm or override the total — it's a worksheet seed for your accountant, not a tax determination.
- Optionally records the expected monthly rent and creates the first unit (with the RentHarbor add-on).
Where the number lives
The confirmed carrying basis and its breakdown are written to the loan's audit trail ("Converted the collateral to a rental") — reviewable on the Audit Log tab and in the Audit Report export whenever your CPA needs it.
What deliberately doesn't happen
The loan's status is not changed — closing it out (Foreclosed / Charged Off / Closed) stays its own audited decision via Edit Loan, exactly like closing the foreclosure case itself.
The circle closes the other way too: when you later sell the rental on terms, see Sell a rental with seller financing.