All Forum Posts by: Christina F.

@Josh Shapiro, Notes are the best place to be when the market starts adjusting downward. We don't buy non-performers according to the FMV of the property; we buy off the UPB (unpaid balance), unless, that is, that the FMV is lower than the UPB. It takes some thorough due diligence on each asset you're considering buying, to be sure you're getting it at the correct pricing to leave plenty of margin for absorbing a hit. What is currently happening right now is there are new investors entering into the note space who are buying them at too high of a price, thus leaving themselves open to greater risk. Pretty much the same that's happening with traditional real estate investing, which is causing the prices to rise. But there are still plenty of deals out there; you just have to be careful who you're buying from & surround yourself with a strong network of experienced note investors so you can reach out for help when needed.

Hi & glad to hear you're interested in notes! There is a lot of info on Bigger Pockets about note investing & it's a wonderful way to help a borrower stay in their home, which also creates cash flow for the bank (you). However, we usually bid to buy NPNs off UPB (unpaid balance), & would generally only bid off of the FMV if the UPB is higher than the FMV. In other words, whichever of those is the lesser, that is the number you'd work off of. There are many other moving parts in note investing, as well as vendors you'll need on your team to help with managing them & doing work outs, such as a licensed servicer, collatoral review, special servicing for loss mitigation, realtors, attorneys, etc, that you'll need in the markets you wish to invest in. You'll need to educate yourself on the licensing requirements in the states you wish to invest in, as well, as those vary from state to state, & even sometimes some weird differences from county-to-county.

Hi! I'm a realtor, but actually mainly use my license to mainly to monetize my leads & don't focus on finding listings. However, when I'm representing a Buyer & have a Buyer's agreement with them, it is required that I represent the best interests of my client, & so should your realtor.  On the other side of the coin, I do want to mention that in my particular market in San Antonio, TX, the market is still very hot, so properties that a buyer may be interested in go quickly, often within 24 hours of listing.  If you believe your realtor is truly not being honest with you, then I'd definitely let her go & find a new realtor. However, check your agreement, as there is verbiage in most listing contracts that have a "protection" period for a realtor in the event that you end up buying one of the properties she may have shown you during the time she represented you.  

First of all, you want to get some education under your belt on how to analyze a tape of notes (on a spreadsheet). Too complicated to go into in one discussion.  There are a lot of note educators out there, ie. Donna Bauer, Eddie Speed, Scott Carson, to name a few. I would say Scott Carson's Virtual Note Buying for Dummies class should be first on your list if your serious about moving into the note space.  Best education I've received & by far the most detailed.  

As far as the list you received, you need to determine if they are the direct source or just a broker trying to sell off someone else's notes. Beware, as there are many who try to daisy chain, just as happens with wholesaling tradition real estate in your local market. 

Once you get some education, it will begin to make more sense to you. It's a wonderful space, but way different than what you are used to doing.

@Lisa Edwards.  It was great speaking with you on the phone last week about this deal.  How did it go?  I'd love to hear if it got sorted out or if there is any other way I can help. 

Andrew, most folks who have contact with direct sellers, banks, servicers, have worked over time & now have established relationships with those sellers, so it's unlikely they will give out that information to just anyone who asks.  However, you can call directly to banks and ask to speak to their secondary marketing department.  I would suggest you stick with calling regional banks, not banks like Chase, WF, BOA who will often only sell to Hedge Funds.  Getting into note investing, whether for residential or commercial, is a relationship-building business.  You can also search hedge funds online, but there are a lot of joker brokers out there trying to sell you someone else's lists, etc., so you have to vet each one to verify they actually own the collateral, otherwise they'll just waste your time.  Hope it goes well for you, & welcome to the world of notes!

Rick Meloni, there is some good note education out there. The best I've found thus far is Scott Carson for note education.  He focuses on 1st lien non-performing notes, so check it out. Excellent stuff! He has a podcast every Monday night, & tonight he's going to be reviewing some assets, performing & non-performing, that he's gotten from a Hedge Fund, so you'll get a little idea of how it works.  Send me an email & I'll send you a link, or search him online. Of course, if you'd like to joint venture together on one, contact me.

@Teresa Ludlow  I agree with Scott.  I did watch the replays, but it is still a LOT of content to assimilate in one weekend -- I've ctually taken the course multiple times, as there was just so much for me to get my head around.  Note investing does have a deep learning curve some new people, maybe even more so from someone who has come from fixing & flipping, so don't be swayed by the fact that it will be a continual learning experience -- definitely not something you'll get overnight.   But who knows, maybe you're one of those exceptional students who gets it & runs with it right out of the gate.  Regardless, I believe you will find it extremely valuable education. Look forward to seeing you there! 

Thank you for your input, Jay Hinrichs.  Always important to know ALL sides of the way things can go!  It's very important for investors to go in with eyes wide open & prepared for all the way a deal can go sideways.  I've worked with eough distressed sellers in the past few years to know they vary as much as the deals do.  However, notes does allow me many more ways to make it profitable, not only for me, but for the borrower & for the investor partnering with me on a deal.  Due diligence, evaluate risk level, & go from there. 

So not wearing any rose-colored glasses here.   Thanks again!

I'm on Day 2 at Note Camp 2.0 organized by Scott Carson & WeCloseNotes.com, where I'm learning so much about strategies to use for investing in non-performing mortgage notes!  Scott Carson gives excellent education on the topic, covering the many strategies that can be taken when you buy owner-occupied non-performing 1st lien mortgage notes at a discount from banks or hedge funds.  The biggest & best way is to actually be able to help the borrower stay in their home.  Most borrowers have had difficulty getting help from the big banks, but when I buy that note, I then become the bank to help rehab that borrower by modifying their loan to make it more managable for them to remain in their home.  There are other strategies available, which I'll post about soon.  Stay tuned!  If you're interested to know more, you're welcome to pm me about it!