lets talk about performing notes

[Or Yeger]

I`m a total newbie so I have some question after reading and listening to a lot of materiel here and on the web.

1) what do you look for in the due diligence process of buying a performing note?
2) what discount should i expect to get 80%-90% UPB?
3) from your experience what are the terms of investing with a JV when someone gives 100% of the funds and the other party puts in the work/sweat (sourcing notes, setting up the payments, negotiations etc).
4) what would you say the advantages of performing notes upon regular real estate investing (buying a house and renting).
5) what kind of return should I roughly expect?
6) in theory how would you go about building wealth with performing notes? arbitraging bank loans to buy notes for example ?.

I hope it's no to much questions, hoping for some good answers.

[Jay Hinrichs]

@Or Yeger  quality first you will pay differently for in different markets..

what your looking for is Yield the Yeilds will be dictate what you pay for the note.

Many quality performing notes that are say 7 to 10% will be sold at Par.

In my ever it to be humble opinion buying a note that was purchased as a NPN and is no performing is very risky.. the chance that you will be right back into NPN status is pretty great probably 50% chance or better.

I like performing notes with good solid borrowers not notes were the borrower has already defaulted as they now know how its done.. plus ower occ notes have all sorts of rules and regs you have to follow . I see this as ( at least for me) if I was going to buy those I would have to be creating a business out of it and be buying them in large quantities each month..

Give me a good stable 9 to 10% APR note that will pay every month as agreed now that Is a solid base to grow on.