Pick 3 States

[Eric Tenenbaum]

I am a note investor and I have purchased notes in 21 states. Here is the breakdown by state: Ohio – 26 Indiana 10 Pennsylvania 9 Alabama 8 Wisconsin 7 Michigan 7 Illinois 6 North Carolina 5 Oklahoma 3 Mississippi 2 Minnesota 2 Texas, Georgia, Nebraska, South Carolina, Florida, New York, Tennessee, Louisiana, Minnesota and Missouri - 1 While notes are my businesses core competency, we have recently come across a funding source that wants to provide us with capital in the form of debt to purchase REOs only. Another contingency is they want us to narrow down our target markets to 2-3 states when using their funds. Keeping in mind that we'd prefer to use the capital on short term deals like rehab/flips, I'd like to know what your guys thoughts are on what states we should pick. Should we go with where we are more concentrated in our note business? Or should we pick states where opportunities for flips are more plentiful and lucrative? I live in California and we have never purchased an asset here, but I wouldn't be opposed to picking it as one of the 3 states. Although the acquisition costs are exceptionally high here and one of the biggest reasons we don't invest here in our note business. Interested to hear your guys thoughts. Thanks!