Performing Notes in Texas

[Stuart Grazier]

Is anyone buying performing notes in Texas? If so, what is the average ROI?

[William "W.J" Mencarow]

Darren, I live in TX and buy performing notes here. Of course the yield depends on a lot of factors (type of collateral, lien position, equity, seasoning, note terms, payor credit, etc.). When someone says "I have a note, what will you pay for it?" I tell them that's like me saying, "I have a car, what will you pay for it?" Then they understand that like a car, notes come in all kinds of models, years and condition. For a bank-quality seasoned 1st on a good SFH, good payor, fully amortized over 120-180 months, market interest rate, I wouldn't pay more than 12% yield. But I can think of several investors who would buy that note for around 9-10%. Feel free to PM me if I can help further.