Actionable steps in aquiring a seller carry back note

[Daniel Torres]

Hi All,

I've been researching for a few months reading the threads, blog posts and a handful of books that I could find and am now ready to start investing in notes.  Before I jump in, I have been formulating a business plan with specific actionable steps for me to follow in the process and I wanted to run it by the group for suggestions and critiques. I want to get started in the route advocated frequently by @Bill Gulley of investing locally by purchasing seller carry back notes directly from the lender.

1) Marketing (go through courthouse records, direct mailing, calling, REIA meetings, etc)

2) Initial contact (1st phone conversation) - I plan to ask some basic questions about the note i.e UPB, payments remaining, interest rate, payment history, etc. If I am still interested at this point what is appropriate to ask for next?? Ask for a copy of the note to review? Ask for entire collateral file? Report from loan servicing company?

3) Initial Due Diligence - Check county records to verify lien position, property valuation, check borrower financials, check title, verify taxes are current, verify insurance.  Are most of these checks things I can do myself with public records??  Should I request an O & E report already at this point?

4) Negotiate -  based on condition of the file, property valuation, borrower credentials, etc.

5) Complete Due Diligence - This is the point at which I plan to employ the use of professionals like an finance attorney, title company, and/or a broker who offers due diligence services (such as those offered by SDXS) to check for note compliance, chain of assignment and all other legalities which I know very little about.

6) Finalize purchase (with an attorney? or broker?)

I know that it there is much to learn and that I will learn as I go with the help of competent professionals hopefully avoiding any big mistakes.  Thanks in advance for any suggestions!