All Forum Posts by: Rob Cee

@Bob M. the bawld guy note fund is just a PPR note fund right? What kind of notes are in that fund 1sts or 2nds? Average LTV of notes in the fund? Areas of the U.S. concentrated in the fund? I'm guessing the fund is composed of re-performing 2nds likely at higher LTV's in lower priced areas of U.S.?

I'm curious what note investors that are on this forum have been buying, selling and holding notes for at least 10 years and have bought, sold, and held at least 50 notes successfully?

Just curious, because in my limited travels I seem to meet a lot of new note investors that have been doing about 1-3 years.  But I rarely come across a note investor that has been doing it 10 years (and through at least one downturn).  It's easy to find rental property investors, flippers, etc... that have 10, 20, 30+ years experience, yet it seems the highly experienced note investors are much harder to find.

Thanks for sharing the excellent post Matt.  I would also have some questions about a $170/mo number for both vacancy and maintenance on a Stockton duplex.  Is Cap Ex included in that $170/mo maintenance/vacancy number?  It seems like just Cap Ex itself over say a 10 year hold period on a Stockton duplex would be more like say at least $250/mo?  Chances are on a duplex in Stockton over the long term (10 yrs) you may get another problem tenant that may do damage or need to be evicted.  And you may have to do a few more of those  $2k+ a pop paint/carpet/etc.. turnover deals.  But being newer 2002 built + having low cost yard will help.

What % of ARV or % of current value are investors currently paying at the sale? From what Kelli says sounds fairly close to retail?

Are there any BP members that actively buy properties at the Sacramento County trustee sale foreclosure auctions?  Or have in the past and know a lot about it?

 I think for a passive equity investor in these projects it may be add some layer of safety if you are investing in a development project where there will be construction lending from banks.  Then you know the bank likely did a thorough DD on the builder and project.

I was doing some research and many large banks and national lenders outsource their construction loan review and management to to Granite Loan Management.  So I was reading their guidelines on their web site and below are some of the things they do to mitigate risks of their lender clients.  Lenders are generally looking to mitigate risk similar to passive investors so I thought it was good info.

Here are some things  they do to mitigate risk for lenders that outsource construction loan mgmt to them:

-they check AND track expirations on contractor licenses, all insurance (workers comp, builders risk, etc...)

-the do full due diligence on the builder (former client references, subcontractor and supplier references, contractor credit report, criminal background check, business credit report, drivers license and w-9)

-they do a through pre-loan analysis of the project reviewing plans, budget, contract, appraisal, permits

-after each draw inspection is reviewed, they make recommendations on if the bank should make the next draw

-they ensure home is built free of mechanic liens

Thanks for the comments Ben.   For construction projects you lend on, do you do due diligence on the builder before you lend on projects (former client references, credit reports, cash reserves)?   I imagine you need the permits to be done before you will lend anything?  Do you use a 3rd party to manage the builder/project review and the draw process or do you do that in house?  Do you get an appraisal on the "as completed value" before you lend?

Thanks @Ellis San Jose for the excellent info.  I will digest this and try to come up with some more questions on some deals I'm looking at investing in.  There are a lot of threads on this forum from the principles/builders standpoint with development projects.  But there aren't many threads from the prospective of passive investors looking to invest in development deals.  

Any one out there make hard money loans on spec building projects?  What are some main bullet points on your checklist before deciding to fund a spec building project?

@J Scott does $80-$100/sf mean absolutely everything except the lot cost?  Including site work foundation, utilities, etc...?