Note Investing Rules of Thumb

[Michael Rosenson]

I was wondering what some rules of thumb are that people use when evaluating note investing opportunities to narrow the focus. Obviously these would only be guidelines but I'm curious what others use to limit the scope of their search. Some ideas that came to my mind were things like:

1) Borrower's credit score over XX

2) Borrower's equity in the property (something like XX% of principal having been paid off)--this would support the "emotional equity" argument that I've seen around

3) Interest rate over XX (gives wiggle room for a lower rate for a loan mod)

4) Senior status needing to be current (if 2nd lien)

5) Needs to earn over XX% of a returns (IRR, ROI, etc)

Do people use any of these?  If so, what is the rule and how did you come up with it?

What other rules of thumb do people consider?