Due Diligence on Mortgage Note Advisors

[Michael McLoughlin]

Hi everyone. I'm a new member and just want to say that this site has been extremely helpful for my learning process.

The past week or so I've been doing some research on mortgage note and syndicate investing. For those that have some knowledge and background, what are the best ways to perform your due diligence on your note/syndicate investment advisor/strategist? What's on your checklist?

BTW I know this doesn't replace looking into the details of the property; neighborhood, any tax liens, property insurance up to date, mortgage payment history, borrower's situation, etc.

Thanks!

[Ed Gray]

"Michael due diligence on notes depends on if you're investing in 1sts, 2nds, performing or nonperforming notes. However there are commonalities across all of them. Knowing the FMV of the property is important. That will give you a good measure of your risk factor based on the details of the note you are looking to buy. How long have the borrowers been in the property. Borrowers who have been in their property over 5 years have settled in and have what we in the industry call "emotional equity". Clean title is another important item. This can be easily checked with an Ownership & Encumbrance (O & E) report. If you are interested in learning more about notes connect with me on LinkedIn. I hold a call every Wednesday at 6PM Pacific Time on all things Notes.

Ed