All Forum Posts by: Bryan Hartlen

Hi @Paul Quinones, fyi your target buyers will change depending on whether your notes are performing or non-performing, if they're notes or CFDs, etc. (eg I'd be interested in non-performing notes or CFD's).

In terms of due diligence docs needed to sell:  notes, deeds, allonges (if notes have been sold before), payment history, O&E report (title history), BPO/RPR

Sierra Vista is south of Tucson close to the border.  Believe it’s predominently an army community.  Don’t really know much about it — Out of my wheelhouse.  Tucson’s cap rate is higher than Phoenix’s but not at 10%. I guess it’s possible that SV being a south Tucson could offer higher cap rate.

I think I’d be careful of partial section 8 rentals.  I’m thinking all section 8 might work... but having a mix I think would drag down rental rates on the non-section 8 units.  My understanding is that Phoenix has a multi month waiting list and in general tenants behave well because of the wait.  But still a stigma for the non-section 8 units.

Sorry I couldn’t provide more specific help.

@Shaun Edwards, like @Greg Scully I don’t see much you can do until you pay down some of your debt.  I mastermind with an investor community in Phoenix area and we use something that we call Velocity Banking to rapidly pay down amortized debt (eg mortgages) using simple interest revolving debt (eg HELOCs) and existing cash flow. Basically you use your cumulative net cash flow to focus on 1 asset at a time.  Once it’s paid off your net cash flow increases and you focus on asset #2 which gets paid off faster because of the increased cash flow. 

If you didn't care about paying off assets completely, you could use VB to pay down the principal in each asset to the point where your initial investment had been recouped and you were effectively carrying the asset with your forced appreciation - which would essentially be backing into the BRRR model.

@Ken Tsai we're just getting into MF and are live in Phoenix.  Average market cap in Phoenix metropolitan 5 - 5.5% for C class properties.  Seen a very few isolated properties sell at high 6's.  Haven't seen any real 10 caps. On Loopnet watch for the performa cap rate claims.  If the actual current cap rate is 10% then there's something else happening that has kept local investors (and worse, California 1031 money) out of the property.

Hi Paolo, I would ask why is a HML selling you a $700k note for $270k? HML lend on the value of the asset. If it could be sold as-is for $500k, most HML lenders would have more than enough resources to find a better exit than selling their note at 40 cents on the dollar.

That note is a 2nd... you need to figure out the status of the 1st.  Your in line behind them.  If it’s non-performing too, in many cases (maybe most), your note and investment gets wiped out if they FC. 

We use JB Lloyd for the reasons @Chris Seveney mentions.

@Ken V. My understanding (and I’m not an attorney... and haven’t even played one on TV) is that statute of limitations would only disqualify collecting on the payments that were beyond the specified period.  Payments due that hadn’t aged beyond the period and all future payments are still in play.

Not always possible, but in my opinion nothing beats local in-person support.  Someone you can sit down with and discuss tactics and actions.  If local isn’t an option then there are also several boot camps and schools. 

Whichever way you go, I'd suggest you start with a basic understanding of what note investing is, (performing vs non), the work involved and the risks. BP, books, local REIA's and even Google/YouTube can help build this base. From there you'll be able to better judge which mentor opportunities are best for you. There are several posts here in BP asking this same or similar question that would be a good start.

In your experience (not asking for legal advice):  Does having an investment prospectus disclosure and/or investor qualification form help at all for non 506(b) or 506(c) organizations? I didn't think they had any affect.  This was my understanding (please feel free to correct):  

1) Anyone can JV with friends and family but no advertising

2) a 506(b) can't advertise but it can JV with non-accredited, non friend or family investor

3) a 506(c) can advertise a fund but can only accept accredited investors

and

4) Anyone can sell (not JV) a note to anyone

Does it matter at all if each asset has one, and only one, JV investor? It's not a blended pool. Each JV investor knows which asset(s) they have invested in? Eg Asset1: Developer + JV1, Asset2: Developer + JV1, Asset3: Developer + JV2, Asset4: Developer + JV3.