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Good morning to all,
Does anyone invest in mortgage notes? I brought my first note back in 2022 and my second in 2023. I am looking to purchase more notes. Like anything else it has pros and cons. You have to do your due diligence
This is all we do. There are pros and cons to every type of investing. Did you have specific questions or comments?
What type of loans are you buying, performing, non performing, seller financed? I can point you in any direction if you have specific questions or need more information on a topic
its funny how note investing is Soup De Jour these days on BP.. 10 years ago no one even mentioned it..
I think its because there are a lot of people pushing seller financing right now and private lending because most cannot make the numbers work on a property - so the gurus need something to be able to sell so its this is the flavor of the month.
I think back on my HML days in Oakland CA.. I took over a mature company that had an investor base that I think average age had to be 65 to 70.. And virtually all of them had owned rentals and maybe kept a few but were just tired on the TTT but wanted monthly cash flow .
so there probably is some of that at play as well Investors that dont want to deal with the PM aspect of owning RE.. Of course we know there is work in notes especially if they are not performing .. Nothing is without effort in this business.
You can say that again. We've had this note in our portfolio for about 5 years which was sub-performing at best when we bought it, got it back re-performing again and been paying like clockwork since. Recently it has gone non-performing and is over the four month mark. Even though majority of what I buy is non-performing, I just do not want to deal with it. Lol
Just cancel it then and walk away :) take the write off at the end of the year. Non performing note bizz is intense I know from making performing notes and when they start to wobble one have to jump in. I tend to work them out the few I get.. U guys earn every dime you get and when I read about Jorge ( cant remember the company) but knew the bizz model. When i read about how their deal was really messed up with most investor probably going to take huge loss's its not shocking.. you have to stay right on top of these and have the manpower to do it. I suspect those guys grew to fast and it got out of control.. I dont know and pure speculation on my end..
Ha, I wish I could walk. It's really not that difficult, only takes an email or two to the local creditor's rights attorney in the state to get the ball rolling. I just get complacent with a nice streaming cash flow for years.
I think you are referring to Jorge from AHP. Yes the biggest issue was they grew way too fast and he set up an entire servicing company to handle all of their deals. If you ask anyone in this business, note servicing is the Achilles heel and it is extremely difficult starting one from scratch. There are a few others here on bigger pockets who have endeavored to do so and can attest to this (but I will not name them).
Basically AHP bought 1000s of low value non-performing loans, these require the most oversight mainly due to the condition of the properties. Many of these were lost in tax sales, and the ones that they got re-performing underwrote loan mods at low single digit interest rates during ZIRP and could not resell them at a profit once interest rates were hiked.
