TREIA Main Meeting - Use Notes to make more profit than a flip

[Brad Millon]

Discover how you can use notes to make more money —for far less work—than fixing and flipping properties.

Tuesday, May 15, 2018

Embassy Suites Raleigh - Durham/Research Triangle

201 Harrison Oaks Boulevard

Cary, NC 27513

You must register at treia.com for this event. Click or copy and paste the link below.

http://www.TREIA.com/Events.aspx?ID=TREIA-Monthly-Meeting-with-Scott-Carson-15-5-15-2018&evntID=15RuMTpFpN2gRfCPXSKJyoV

Scott Carson, founder of We Close Notes, never intended to invest in nonperforming notes despite previously working as a mortgage broker and a financial adviser. Like so many others investing in real estate, he started purchasing properties and transitioned into short sales. But a phone call to a bank to negotiate a short sale changed the way he invested.

“I was told they weren’t interested in a short sale, but they would sell me the note,” he explains.

A real estate or mortgage note is essentially a written promise to repay the money loaned to purchase a property. When a borrower defaults on the loan, banks and other lending institutions will sometimes decide to sell what’s considered a nonperforming note for pennies on the dollar to cut their losses. The person who purchases the note is entitled to modify the terms and receive payment for the debt.

Carson eventually agreed to purchase the note instead and, in the end, wound up making more money on the note—for far less work—than he would have if he had been able to purchase the property as a short sale. He immediately shifted focus and, in 2008, founded We Close Notes, a company specializing in finding, purchasing and selling nonperforming notes on residential and commercial properties.

Today, We Close Notes is considered one of the leading resources for those who want to learn how to buy and sell nonperforming notes as well as those looking for investment opportunities.

An Ongoing Opportunity

Unlike the short sale market, which peaked and dried up, notes offer an ongoing opportunity to invest in real estate, according to Carson. As long as there are loans, there will be borrowers who default and lenders willing to sell the note. In fact, right now, he points out, there are 6 million foreclosures, and five-year loan modifications are beginning to adjust. Many of those will default, presenting even more note opportunities.

Investors who understand notes and know what to do with them can usually expect good returns, but you will need patience—expect to wait 12 to 18 months for a payday on a note versus 90 days on a fix-and-flip project—and you can’t be overly analytical.

“There are a lot of moving parts, and overanalytical people struggle with it,” Carson says. “They want a hard number that leads to a hard number that leads to another hard number, but there is a lot of ‘fuzzy math’ with notes.”

Flexibility also helps when it comes to the borrower. One of your first tasks after you’ve purchased a note is to find out why the borrower isn’t making payments and offer a mutually beneficial payment plan.

Discover how to add notes to your real estate strategy Tuesday May 15 at 6 PM at the Embassy Suites in Cary.

Sign up at treia.com

Members - Free
Nonmembers - $15
First Time Guests - Free

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