All Forum Posts by: Dan Deppen

#3 is a huge one. Given its a small industry you might think people would be more careful about ruining their reputation but that's not always the case.

The actual closing is fast, what can take a while is the servicing transfer. I've had them take between a week and over 2 months. It all depends on the specific servicers you are dealing with. In theory there will be a cutoff date specified in your sale agreement and payments received after that date will be forwarded to you. In practice sometimes servicers don't transfer them, or you have to fight with them to get them transfered.

I use both Allied and Madison Management. Monthly costs range between $18.50 and $35 per month for performing loans.

Just use the P&I payment. The tax and insurance escrows do not go to the loan. 

For paymet I subtract the monthly servicing fees, and also include the up front due diligence costs in my costs basis.

Everyone does them differently. But basically, most of them have the form of one partner putting up most or all of the funding, the other doing most of the work, and then profits split 50/50 upon an exit. 

There are some things to be careful of though. It really needs to be a partnership, not a passive funding partner otherwise you can violate securities laws. Consult with an attorney to make sure that the arrangement is legit. If you are providing funding, do your due diligence on your partner, and I mean really do it. Make sure they not only know what they are doing with notes but that they have a history of doing right by their partners. There are definitely bad actors lurking out there. Also make sure you are in agreement with how the decision making process is going to work and that you have access to all the data related to the deal. 

These kinds of loans are common, but there are a few things to keep in mind. Make sure you have an attorney draft the docs and verify that the title is clear and you will be able to foreclose if necessary. Also, how well do you know the person you are lending money to? I've been amazed at times at the sometimes outright criminal behavior of people who I would have never expected it from. I say this because I made the mistake of lending to a friend of a friend. Now I'm foreclosing but its a long, expensive and stressful process. 

I use Simplifile and it works fine. Most of the time I send my files to someone to handle the recording because its just easier.

Thanks for the heads up Chris! So far I haven't heard from the state on any of mine.

I have a BS and MS in mechanical engineering. Worked in the aerospace industry for many years but now do real estate full time.

Congrats! I have one in Memphis that will likely go to foreclosure, so this is good to hear.