sourcing notes online

[Les Goss]

I currently get my notes from a few hedge funds and local banks. I'm wondering about your experiences, positive or negative, with Watermark and FCI Exchange. 

Thanks,

Les

[Paul Birkett]

The challenge we find with buying direct is that many banks simply cannot sell to an unknown counterparty and not in sub $5m deals. They are worried about how the loan will be handled especially if its a low-value home housing a vulnerable borrower.

So most institutions prefer to package up the loans and sell them to another bank or non-bank mortgage specialist. Some regional banks may sell one-off deals but we have not had much luck with that. I think we have bought fewer than 10 loans that way. I agree with @Bob Malecki  - build relationships with asset mangers and grow over time. 

Out of 100 calls received as an asset manager, you may close 20 deals. The asset manger wants to see you succeed but he cant tell if you are real or not until you have actually bought something. it won't happen over night but it will happen if you persist.

Lastly, its better not to bid at all then to send in a low-ball - especially when you are trying to build deal-flow. That just wastes everybody's time and makes you look unprofessional.

I have sold assets to buyers we found on LoanMLS. It started as a one-off deal and now they are buying most of the notes we pick up in TX, Ohio and a couple of other states.

In summary - persistence in the relationship building process will pay dividends

good luck

Paul