Can finding notes to purchase be automated?

[Don Konipol]

As a direct private lender (hard money commercial property) we are able to turn a profitable investment into a VERY profitable investment a couple of time a year by purchasing the existing note form the current lien holder at a substantial discount, rather than pay if off when we originate a refinanced loan.

As our most recent example, we purchased a note with a $3.3 million principal balance for $1,775,000., restructured the note providing the borrower a discount to $2,600,000, with a two year balloon, and now are collecting monthly payments on the restructured note.

Obviously, we’d much prefer to expand this side of our business. Almost all of our “deals” are brought to us by mortgage brokers, attorneys, or other third party intermediaries. We have attempted, so far without any identifiable success, to establish relationships with banks, SBA, other financial institutions, asset dispossession managers, etc. When we do receive offers of notes for sale, either these notes are priced way too high for the risk, or the properties are residential (we do commercial real estate only), or we receive a bulk offering with a financial commitment requirement above our capacity.

Since I am not inclined at this stage of my life to engage personally in a cold calling, cold emailing, or any type of intensive personal sales campaign, I was wondering if anybody had any success utilizing contractors or employees to hunt for these notes that institutions may be interested in selling?