States you'd steer clear of, if a beginner Note Investor and why?

[Anthony Giunta Jr.]

Hello fellow BP'ers,

Just attended the NJ Distressed Mortgage Expo this pass weekend and really enjoyed it. Both from an educational and networking aspect. Thought it was a great event and met a lot of nice people there. 

I am new to Note Investing and trying to formulate some guidelines that would narrow down the many aspects of getting started.

If one were to seek out 1st/2nd/PN/NPN notes, are there any states you would recommend staying out of until more experienced?

Thanks!

[Adam Adams]

I would suggest seeing if a license is required and avoid those states. IL, GA, KY, WA are a few that I know of off the top of my head. GA is OK if you are buying just a couple in your name, but as a business, you need a license. Talk to an attorney from that state. And you might need to ask if you can conduct business in that state as a foreign entity. Sometimes you are required to register an agent in that state. Real Estate attorneys don't always know that answer.

If you get a land contract, aka Contract for Deed, find out if they are legal. I wouldn't buy a CFD in TX. And MO is fuzzy on how they are handled.

Redemption periods are important if you wind up getting the property through foreclosure. You don't want to have to hold on to it for 2+ years. I think Maine might be the worst, but don't hold me to it.

So find a state you like and learn everything about it. Then expand. As you see, there are a lot of little details that can make a difference.