All Forum Posts by: Joshua Andrews

Owner financing is available to investors only. Purchase price $60,000. 10% down. Rate/terms to be negotiated.

Both units rented by long-term tenants. Property is in good condition and cash flowing. Rent roll and expenses available upon request.

This is a great way for an investor to own rental property without the hassle of banks or traditional lending, credit scores, etc. We are selling to free up funds for other investments.

Please contact me directly for more details.

@Sandy Uhlmann thanks for the mention. We are laying the groundwork for our fund and expect to have more details soon. There has been good information from many of the posters here. I agree risk and expectations vary from individual to individual, and it's going to depend on the investors comfort level. I see both 1st's and 2nd liens being profitable. We have experience in 2nd's and have been happy with the results. That being said, there are model's like @Bob Malecki which utilize 1st liens that make a lot of sense and are profitable for all parties.

Josh

@Bob Malecki makes some good points. There are ways to manage or "manipulate" the risk, but there is a significant learning curve. Instead of ROI, we use a yield calculation to determine profit. Yield is essentially how hard your money is working, or the interest rate your invested money is earning on an annualized basis. At a portfolio level, yields are quite high. I am hesitant to give exact figures as they vary and your experience may be different. I do not want to give the impression everything is a home run.

Josh

I have had excellent success with underwater assets. There are probably 5-7 or so viable exit strategies even when no equity is present. Despite what it may seem on the surface, a well selected 2nd mortgage with a performing first is a wonderful asset. I buy these almost weekly.

The key is the up-front due diligence. Simply picking notes at random will get you into trouble. The due diligence process is 80% of the game, and also where the heavy lifting is. Also, recognize not all of them work out. This is why you pay a heavy discount both for the risk and the fact they are non-performing. Our company enters into the process with the goal of creating a win/win loan modification for the borrower. However, it is the borrower who ultimately decides what course of action to take. You cannot force someone to do something or take a specific action.

A few ideas on exit strategies.

• reinstate loan in full and have the borrower make payments according to original promissory note
• payment plan (forbearance)
• loan modification (my favorite)
• discounted payoff
• sales assistance (sell the home)
• short sale
• foreclosure
• deed in lieu of foreclosure
• foreclose, then rent the property

There is much, much more to be discussed on this topic, as this only scratches the surface.

Josh

Bob I just now saw your post. It is after 10:30, so I will see you tomorrow. I'm sure there will be drinks again soon :)

I will be attending. Would enjoy meeting up with you both!

I have not researched this fully, but here is an article that may provide some insight.

http://thomas-law.com/warning-2-2-note-buyers/

Its worth attending. 

I can attest from personal experience that @Bill McCafferty knows his stuff. He is a tremendous asset for anyone who wants the real deal information on 2nds. He is one of the few individuals who has personally worked hundreds of files to completion, and I am lucky to have met him early on. 

I have also purchased non performing notes from PPR, and can attest to what @Dave Van Horn has mentioned. The idea that you need a "fresh note" that has not been worked is bunk. The main area you should spend 80% of your time focusing on is the due diligence process. You will spend a good deal of time and effort sorting the wheat from the chaff, but if you have systems in place it makes your life much easier. Working the assets yourself is not a weekend hobby or for the faint of heart. 

Other opportunities include joining a note fund or buying a performing or re-performing note such as Dave mentioned.

Josh

As much as possible...