Due Diligence on Performing Notes

[Nathan Patterson]

Hello BP,  

Alright so I am new to Note investing, I've been learning as much as I can before taking the plunge. But something I have noticed is that the majority of video's, blog posts, articles are about NPN investing. Because of that, it makes it difficult to really know what to look for in a performing note. So what I want to know, is for you seasoned investors out there, what are some metrics you look at while analyzing performing notes to know if it is a good investment or not. I'm talking about ROI, IRR, COC, NOI etc. Or is it more of a whole picture aspect and you look at the entirety of the potential deal not just a few things to let you know it is a good investment. I've gotten lost in the wealth of information out there on note investing and I'm not sure what to look at when it comes to analyzing performing notes.

[Gail Greenberg]

I can't get into all the intricacies here but I would just say this: I question the idea that NPNs are more risky than PNs. NPNs are having problems now, but you have lots of financial room to solve them and still make a profit; with PNs you're putting more money at risk and are far more dependent on things going as expected with no surprises.  In notes as in life, I don't like to depend on everything going perfectly ;)