Formula for Purchasing NPN's

[Keturah Rucker]

I'm currently in the preliminary stages of buying notes. I've done some rentals & wholesaling of properties and notes. Now, I'm looking to buy notes. I would like to know how to work them efficiently. I am aware of what most of the steps are when you purchase them, I'd like to get an idea on the format or formula of the steps to take 1st to last in order not make to many costly mistakes.

Do you have any ideas?

[Dion DePaoli]

@Keturah Rucker it would be helpful if the post wasn't so vague.  

Steps to purchase a loan are different from managing a loan in its various stages of performance.  Working a performing loan is less involved than working a defaulted loan.  

Any information, when you have none or a limited supply will be helpful for sure but I advise to be careful not to group all loans and purchases into a cookie cutter template.  

Dispositioning a loan starts with good due diligence but good due diligence isn't, in and of itself, dispositioning a loan.  I also would not consider due diligence the same as the proper price to pay for an asset.  

The easiest loan to work with will be one that pays as agreed.  There just isn't much to do.  As loans fall into greater distress there are more moving pieces.  How to collect.  When to advance.  Bankruptcy risk.  Default risk.  All these and more will influence how well your efforts and investments will work.  

What do you think you are looking to invest in, in regards to performance of the loan?  

What is your risk tolerance for your investment?

What is your return expectation from the investment?  

How much capital are you planning on allocating?  

What do you think it means to "work a loan"?

Before newbies look for checklists of things to do, I find it valuable for them to answer those questions.