Performing Note Broker Contract

[Patrick Sloan]

I am interested in purchasing performing notes from a hard money lender, so I've been trying to do my diligence prior to simply handing over money.

However it seems a little more difficult to get a level of comfort with the folks I've been speaking with than I had expected, for example I have requested a sample of the contract up front so I can ensure I have recourse in whatever state the lender is investing in and I either get some hokey word document that really says nothing or I simply get a "No I'm sorry we don't do that". Am I missing something? I have never purchased performing notes before so I really could be missing something but I keep hearing that voice saying if 12% - 18% ROI seems too good to be true it probably is?

Thoughts suggestions recommendations?

[Jay Hinrichs]

careful on new origination over 12% in todays market anything higher is usually priced for risk.

Not sure what contract your looking for..  the Note spells out the terms.. deed of trust recorded secures your interest.

if you need a personal guarantee  from borrower thats done in a separate document..

you can ask to review a sample note and trust deed and P G  .. other than that there is just borrower info.. credit score net worth that type of thing.. you may also want to background your borrower make sure they are good citizens

OH also you want to see title report if its a fresh funding.. or a copy of the title insurance if you buying existing and make sure the insurance is still in effect for any assignee  as you would be buying the loan via an assignment