New Note Investor - tips when learning the ropes

[Chris Seveney]

Ok

See a lot of people “chasing” notes, sellers etc on Facebook and I wanted to provide some free tips:

1. ANYONE who says the term “they are direct with seller” is not. They are a joker broker. In four years I have NEVER met someone who used that term. Legitimate brokers will tell you who the seller is and it’s usually a large fund that is selling some stuff to Main Street investors.

2. Buying notes from a paid mentor is a bad idea. If they are teaching you to buy good notes at the best price, how can they sell you a note at best price when they are also looking to sell it for the best price for themselves.

3. Run a background check / skip trace on anyone you are giving money too. Think of them as a tenant who is moving into your basement.

4. While BP, Facebook and other sites you can learn a lot of valuable information- anything related to risk run by your attorney and anything related to finances run by your cpa. If you are too cheap to do either one then you are not going to last long in this business.

5. Manage every vendor like they are your 3 year old. You must constantly watch them, give them a “good job” when do something good and let them know what they did wrong and try and have you both learn from it.

6. Before you go off on a vendor, make sure you understand the process. For example I see people complain about the boarding process taking too long but don’t realize it will take 4 weeks.

7. If you have partners- make sure to communicate with them. Whether good news or bad let them know. Also in regards to good news, make sure it’s finalized before broadcasting it. I do not know how many borrowers have stated they would reinstate or payoff only not too. Don’t get hopes up - you could say - borrower has said they will do x but I will believe it when I see it.

8. Don’t be pressured into a quick closing. A title report and attorney review will take 5-10 business days. Typically closer to the latter, let the seller know that and communicate with them on it, if they want to close in 48 hours do not.

9. Never trust a seller BPO or title report

10. If you bid, be prepared to buy the note - also be prepared that you may own that home.

I could go on but wanted to throw ten out there.