What does it take now to be a successful Note Investor in 2018?

[Martin Saenz]

The Note Industry has changed drastically over the last 10 years.What does it take now to be a successful Note Investor (whether you are on the performing or non-performing side)?

Few thoughts are:

1) Aggressive action plan for seller outreach

2) Deeper relationships as the surface deals are not as present

[Jay Hinrichs]

Originally posted by @Brian Garrett:

How would you advise someone looking to get started with note investing to do so in 2018 given your two points above if they don’t have any pre-existing relationships in the space?

I think the first thing a new investor needs to do is understand or decide which niche' you want to be in.

NPN or performing..

Owner occ   or commercial

once you do that there are on line exchanges  FCI is one.. they have all sorts of notes that are listed you can peruse..

Hard money lenders many times will let you invest in their short term debt.. ( these are commercial purpose)

One thing I get a lot of is direct mail.. its exactly the same method that real estate wholesalers use.

they search public records.. get lists of private owners of notes.. ( usually the target is a seller carry back) and then they blast out direct mail offering to buy the note from the current note holder.. the pitch in 99% of those is all the same  same buzz words..

Much like title loans etc.. you need cash today.. don't risk note not paying we will take it over. INSTANT cash offer today  .. call today for cash quote... etc etc. I have been getting these for ( well my dad got them in the 60s and 70s  LOL so not sure when it started).

There are brokers that specialize in mid term commercial paper which I have termed Turnkey Note buying.. IE the notes are in a system the system stays the same are fully vetted and presented to note buyer.. Note buyer can literally decide in a few minutes if they want a note or note.. and the notes are constant they are always in inventory .. no hunting and needing deep contacts like the secondary market. for NPN or big note tapes.. that get sliced and diced.

So once you figure out what space you want to go in.. then you can narrow down your focus..

Also boils down to do you want to be passive or do you want to have notes you have to work on.. ????

As well as there are note funds out there for accredited investors.. they fill up quick though from what I have seen.. or lately deal flow has been tough.. AS pricing has risen for owner occ debt..