Why Note Investing is a Blankety Blank!!!!!

I just want you to know the 3 big issues that you will confront with non performing note investing.

1.  Title -  most of the NPN's that you purchase will have some type of title problems.

a. No note - may only have a copy but no live note.

b. Missing assignments - this is the document that assigns the security agreement.

c. Missing allonges - this is the document that assigns the note.

2. Taxes - most likely the taxes have not been paid in the past few years and will include code violations and back sewer and water fees.  Close to foreclosure by the county.

3. Blight - Many of the homes will be in "War Zone" and I do not mean Afghanistan. May be subject to demolition.

I tell people these items and they ask, "Why would you invest in this type of risky investment?"   I will tell you why, we only pay 7-15 cents on the dollar because most investors do not want to deal with any one of the issues, let alone all three.  We have a staff that understands title issues and how to cure, taxes may be able to be negotiated, and blighted areas become write offs to compensate for the obscene profits that we are able to make on the others.

We fix and flip the notes like the people on TV fix and flip houses,  we are able to negotiate some to start paying as agreed if the property is still owned and occupied by the original borrower, we can get deed in lieu on some, some are foreclosed, some are held for rents, some are rehabbed and sold retail, some are used to trade, some we finance for local investors that do rehab, rent and hold.  We have a special investor financing where we can finance 100%, they pay the taxes and rehab and we will finance a first and second on the property.  Five years they own free and clear.

It is not uncommon to make 150% or more on buying a tape of non performing notes.

However, it is not for the "weak", there is a lot of work that has to be done.  Every state and in some cases, every jurisdiction has different rules of what can and cannot be done. 

If you do not want to do the work yourself, there are a number of companies that can get the work done for you.

You can always contact me if you have questions.  I schedule twice a week where I will work with you to help, where  you can ask me any question that you have about real estate or note investing.    Just don't ask me about Class A building or buying - I fear to tread in the Blankety Blank!!!!

Most fun that I have had in 42 years of real estate.