All Forum Posts by: Joshua Andrews

Hi Joe,

It sounds like you are on the right track, although I would recommend holding off on a note purchase until you understand the basics a little bit more. There is a lot to learn about notes, from the basics to different note niches to focus on. None of the learning is difficult, but it is necessary for you to understand much of the basics to avoid being taken advantage of or buying something you don't fully understand. I personally love notes, and would be happy to talk with you and provide some feedback or guidance based on my limited knowledge from buying them for myself. Feel free to post any specific questions I or another BP member might be able to help with.

Josh

Hi Russ,

I personally don't have any experience with vacant lots, but I can tell you they are much more speculative than homes. Of course the right lot in the right place could be worth millions.

Unless the lots are highly desirable, I would think it may be difficult to find buyers and create paper on them. This is said of course with the understanding I don't know how desirable the lots are. If they are on a golf course, well then you might be onto something.

If the goal is simply to flip them and make a chunk of cash, I think you may be sitting on the lots much longer than you anticipate.

- Josh

There are too many variables here to answer the question with any sort of accuracy. Also, several of the questions depend on personal preference and risk tolerance of the investor. 

- Josh

This is sound advice.

 Josh

Great feedback thank you both. I am not originating and everything I buy is handled 100% by a licensed servicer, so at no time do I have interaction. I will shop around. Thanks for the feedback!

Josh

Hey Guys and Gals - I am wondering what type of insurance you may have on your LLC. Specifically an LLC that holds notes for cash flow. I am assuming the coverage would be for Errors and Omissions, since there really are no moving parts like an office, staff lawsuits trip and fall, or renters suing you. What is more likely is a homeowner suing for some misstep in lending.

I am curious how others have utilized insurance to help minimize risk for their LLC?

Thanks!

Josh

Excellent post and well said Dion.

Josh

People buy and sell for any number of reasons. Not all borrowers will want to refinance, nor are all able. If you buy a note, plan on being comfortable with the borrower just paying as agreed, and if he is able to refinance then great! If not, then you are still happy. Early payoffs are blessings but cannot be counted on, at least from my limited experience.

Josh

What Mike and Bob said is true. Focus on the yield, not the discount. Think of yield as the interest your money is earning. Do yourself a favor and get a financial calculator too. Everyone has different models they like. I love the HP 12C. You can find good notes at 18%, but they will have different characteristics than notes selling at 12% as has been mentioned. Without over simplifying, a note is a promise to pay. The borrower can stop paying at any time, for any number of reasons. Your ultimate backup should be equity in the collateral (property) which can be recovered if the borrower defaults. That's what matters. And other things of course!

Josh

Great post Chris. Good thoughts and a very open honest communication. Regardless if it's someone's cup of tea or not, the candidness of your post will be appreciated.

Josh