Note Investing (NPNs) in 2019

[Martin Saenz]

My sweat spot with note investing is buying 2nd non-performing mortgage notes on properties with over 150k FMV. For me, it usually equates to a better caliber borrower, higher quality property, nicer neighborhood, etc. Since my company formed in 2013, my motto has been, ‘helping homeowners stay in their homes with payments they can afford.' Hence, I always work towards modifying their loan so they can resume making payments that work within their budget while earning me a living (i.e. I do this full time)

In the past 30 days I’ve ran through a combined 800+ 2nd non-performing mortgage notes and I have to say it's been a very real experience seeing how pricing has gone up drastically in 2019. However, it's equally nice to see recent FMV spikes on properties and how that justifies some of the hike in price. Early on, I used to buy a ton of 2nd’s that had no equity and modified the notes just the same (along with getting burnt on some here and there). Overall, it’s easier to work with fully covered 2nd’s but boy do you have to pay more for them at this point in time. Just rambling on this post, but as of today I’m convinced more than ever I need to focus more time and energy on OUT OF THE BOX sourcing strategies to drum up deal flow if I’m going to maintain my parameters and motto.

[Bill McCafferty]

Out of my last 20 2nd Mortgage purchases over the last year and a half, 15 have been Re-performing 2nds for that reason. I'm getting better deals on Re-Performing 2nds, than Non-Performing 2nds.