Wanting to buy notes from individuals

[Austin S.]

I am looking into purchasing some notes. I have a list of private mortgage lenders in my county as a starting point. Do I want to craft a letter and send it out to the note holder? That seems fairly impersonal and didn't know what a response rate might be. Or would I be better served cold calling them? In either instance, what are some talking points to start the discussion with the note holder besides "I'd like to buy your note at a discount" LOL

[Dion DePaoli]

There is a big elephant in the room here. You are assuming that someone would be interested in selling the note at a discount. Discounting is a function in the market place but I am not sure you understand what prompts a discount and what does not.

Private lenders are going to be Par or Premium sellers not discount sellers. Why sell to you at a discount if the note is new and the borrower is performing?

Discount sellers have assets that are defective in some manner. Paperwork defects, borrower performance defects or collateral defects, etc.

Perhaps it is not posted but there is a wide array of notes to purchase. Purchase criteria can be your desired yield, investment term, property type, geography, occupancy, maturity, performance, etc, etc...the list goes on.

Additionally, through the post I am not sure you understand the difference between the originator and the note holder. Not all lenders hold loans in a portfolio, even private folks sell stuff off. That then leads us to an understanding of the risks involved with that business model for a note investor.

Some concepts to think about as you venture off into the sunset.