notes, NPN, Preforming notes

[Keith Blair]

Hi BP community,

I'm ready to get into note investing. Now that I have a plan, I would like to share it with everyone. I've been a residential General Contractor for 30+ yrs and now that my body is broken, it makes sense for me to invest in NPN or non-performing notes.

My strategy is to buy vacant NPN and rehab to rent or resell. So I did a test for my due diligence.

1. I picked a random NPN in a non judicial state that selling for 20K the home is valued at 60K but the borrower hasn't made a payment since 2008. FYI property is occupied.

2. I went to look up the property on Trulia and other sites and it does confirm the value of the property is close.

3. I wanted to see if I could find out who lives there and contact them. via PH,Cell,email...ect. PS. I was unsuccessful, all these sites I used wanted too much $ for the search or just outdated info as well as very bad reviews. 

4. After that I went to that counties website through Netronline.com and try to pull up some records from that property and even call them to confirm info.

5. If I work in all the numbers that I would need to repay at closing?...back taxes, foreclosure costs, etc. how does that work as far as making an offer after being comfortable with the purchase.

6. Is there more DD needed and if so what are the snap shot basics to analyzing a deal? ex. Do this, this, and this to see if it’s a good fit to move forward or throw it out? 

hope this all makes sense to someone in the note business

What do YOU think?

[Jay Hinrichs]

Good way to lose your money..  You cant buy notes on houses you want to keep without looking at them.

Also some other can chime in but some older homes if they have been in default for a certain amount of years the mortgage may be uncollectable.. I know I just did one in Washington like that.. the bank just deeded it to the owner since the statue had run.. I had never seen that in 4 decades but I bought it and got title insurance so I know it can happen.

I buy NPN VERY occasionally and like you for only one purpose to own the asset.. but I would never buy one without me physically inspecting it or someone I trust a bunch.. I would never buy one also without fresh title insurance if I was looking to get it and then refi..

Now I know most people don't do it the way I do.. they will buy notes just with assignments because they don't want to spend the 700 or 1000 bucks for full escrow and title .. but all of MY notes that we help people with I insist on it.. 

If your just looking for cash flow May I suggest that you lend money to your fellow contractors who are doing fix and flip you will come out probably ahead and not have all the brain drain of NPN.. especially ones out of your market and if its non judicial and your in the NE that means its not close to you.. ???

Now others are going to want you to partner with them on these as they have experience and I guess you could try that but .. not a method I Personally like... you being a contractor and if you have the cash I would skip all this and go to Frist position rehab lending... the other type of notes you talk about your body is broken .. well your brain and pocket book could get broken you buy the wrong notes..