What Not To Do When Buying A Note

[Chris Seveney]

Recently, we have seen an influx of bidders get loans under agreement and then after a month of due diligence (where it should take about two weeks) come back and try and fade a bid for reasons that make zero sense.

I know in traditional real estate people will put an offer and then get an inspection done to try and renegotiate the price.

For note investing, buyers should remember it is a very small circle of investors and if this is your MO, then it will not be long before you get blackballed

For example, if a loan has a balance of $100,000 and you will pay $80,000 and the seller has a value of $275,000 for the property and your bpo comes in at $260,000 - trying to explain tot he seller you need to fade your bid because there is $160k in equity not $175k is not gonna fly. Full equity coverage is full equity coverage. Oh and trying to fade it by $20k makes you look even dumber….

Just my rant for the day.