Looking for sources for Non Performing Notes

[Anand Narayanan]

Hi,

I am a newbie to REI. I am interested in Non Performing Notes (NPN). I have looked at FCI, Watermark, Granite and PPR. Nothing impressive to buy at the moment.

I am aware that NPN are mostly traded in bulk tapes between banks and accredited investors.

any referral sources who JV with banks/accredited investors on large NPN purchase deals and willing to distribute couple of notes to individual investor like me?

I will do my own due diligence and bpo.

thanks,

anand

[Patrick Desjardins]

Originally posted by @Jay Hinrichs:

Originally posted by @Martin Saenz:

Originally posted by @Jay Hinrichs:

I suspect those players are going to keep the best notes for their fund as is their fiduciary responsibility to the fund and their clients.. and then off load the ones they deem inferior for what ever reason to those like you

 Nice point.  I would just add that sometimes they off load notes outside their parameters which may be within your parameters.  The key is to cast a broad net and build lots of relationships.  

LOL their parameters is great chance of performing and returning capital.. off load the ones that are not.. !! I know that's is simplified but its logical.. I know I would do it that way if I was in that business.  my clients get the best and we dump the rest  

 Jay, with all due respect, you confuse theory with reality. Yes in theory all of the good notes should get scooped up at the top and only scraps would trickle down. It's true in some cases but it ignores the 2 best opportunities for smaller investors that have the luxury of cherry picking:

1) Stuff that doesn't fit their model. For example, I purchased a note for 4,600 that had been sold 4-5 times. The lady had gone through bankruptcy. Every time a new company bought the loan she told them she wasn't responsible for the debt so the banks / hedge funds sold it, collected their 10 or 15% profit and were happy. They didn't want to deal with it because of the velocity of money concept. As a smaller investor using my own cash, I was less bound by those constraints so I just started foreclosure, got into an agreement, and have since been collecting several hundred dollars per month. Those hedge funds could have done it themself but it didn't fit what they were doing at the time.

2) Good old human error. I bought a heloc for.. I can't remember, something like 2,400. The hedge fund I bought it from thought it was 300% underwater so they were desperate to get rid of it. Turns out the homeowners had paid off their 1st mortgage and the heloc was in 1st, instantly worth 15k-ish. We ended up giving them some cash and doing a deed in lieu. All in for 10k, sold house for 36,500.

Now here's the deal - I'm not disputing your model is most likely easier, more easily repeatable, and more predictable. Those are all great. But saying that no good notes trickle down is just not accurate.