All Forum Posts by: Account Closed

Hi - just wanted to bring this question up again, has anyone on BP done a deal with Note Factory? 

The principals there also run Alamo Home Source, and looks like Alamo fixes and seller finances San Antonio homes, and Note Factory sells those notes. This seems like a reasonable business model to me, and like any other note purchase I would do an independent review of the property value + collateral file. Living in TX, it's also pretty easy for me to go to San Antonio and put eyes on the property + meet the team. On the compliance side, given the notes are to owner occupants and yield 10+%, I think these may be High Cost loans? And if so so would need to also verify the CFPB rules are being met like escrow and pre-counseling.   

So assuming the above checks out, just wanted to see if anyone has personal experience with them, and if there are any other due diligence items I may be missing? 

Hi @Sonu Sharma - on the setting up the payments portion, a servicer like FCI should be able to easily handle that since servicing performing loans is pretty standard. 

On closing - I'm new to Dallas and setting up meetings with RMLOs over the next couple weeks, but there is a BP meetup next Tuesday in the Events section that is usually well attended. I'm sure there will be investors who can suggest some originators they may have worked with. 

@Accario Trotter - I think the key here is always be learning, and figure out ways to be helpful to others. Everyone feels overwhelmed when starting out (myself included), but if you patiently take steps to learn a little bit everyday, you'll be surprised how much knowledge you've gained after even a couple weeks. So specific suggestions would include - 

 -Listen to every BP podcast (it's amazing what you'll learn after listening to every episode), 

- Spend some time everyday on the forums (google things you don't know and ask questions)

- No one is going to reply out of the blue saying "I'll be your mentor", unless it's for a fee. So instead, check the events section for local BP meetup groups and go to all of them. Keep an ear out for issues people say they are having, great opportunity to build a strong relationship with experienced investors 

@Linda S. - your suggestion about classes at a trade school is great! I haven't heard that one before

Great event, thanks for putting it together and nice to meet everyone!

And also, good rule of thumb is make sure you have 3-6 months (go with 6) of expenses in cash reserves. You will sleep a lot easier at night.

Hey @Account Closed

Nice to see someone from the UK here! Just for everyone’s benefit:

Flat = apartment or condo

BTL – Buy To Let, which just means a property you own that is being rented out (let = rent)

Now taking a stab at your question:

1) My suggestion is to stay conservative on your financing. If a deal only has strong cash flow figures because of an aggressive financing strategy, you need to pass on that deal and find one with stronger numbers (which I know is tough in UK but can be done). Keep in mind also, if I remember correctly, UK mortgages for the most part are fixed rate for only a 1-3 years, and then switch to variable. So you really want to be conservative with your financing over there because you don’t have the same 30 year fixed rate loans we do in the US, and there’s no promise rates will stay where they are now.

2) Generally, your idea that you can buy a house, improve the quality, and then refinance at the higher valuation and pulling out all of your equity (deposit + renovation costs) is correct. Biggerpockets calls it the BRRR strategy and you can find a ton of information here about it. It's going to be really tough to find a deal where the numbers work, but you just need to be persistent and a deal will come through.

3) You can if you like, but remember you are most likely going to lose all the favorable lending options available to someone who has a 9-5 job. Obviously speak with lenders, your CPA and lawyer, but its very common for folks to start out owning residences themselves vs corporate entities, and just having some sort of liability insurance.

If you do get an entity and what business credit, if I remember correctly you just need to register the entity with HMRC etc, and start out getting a credit card with whichever bank you choose to open a current account with. But again, have a CPA on hand to help.

Extra thoughts: I would have a think about getting a loan against your flat, even if its small like 20% LTV. Having a £350k flat with no debt is great, but taking out a small loan against it and reinvesting it in productive investments (like a rental) is not something I would consider risky.

 Either works for me

Thanks Bob

@Jay Hinrichs - they were owner occupied notes (the borrower was living in the home). Didn't end up buying them from the current owner of the notes (he's the one who self-serviced them), but was helpful to get everyone's view above. 

By investment purpose notes I take it you mean hard money/private loans to investors? I haven't come across those notes for sale, but would take a guess and say many times those are done without a servicer since the borrower is typically an investor's LLC and there's less compliance risk involved?

@Daray Olaleye

@Jerry Thompson - you're definitely not alone there. Funny enough I was thinking the same thing the other day, it would be neat to meet up with other young professionals on BP. 

Let's grab a drink sometime (I'll shoot you a pm), hopefully there's others here who would be interested as well.