All Forum Posts by: Jeff Costa

Thanks, @Chris Seveney I will gladly take the referral. Thanks!

Sorry, @chris. The state is PA.

I'm searching for references for a land note collateral review. While Dickie Baldwin at BAG came highly recommended, I haven't been able to reach him as his mailbox is currently full. I would greatly appreciate any other suggestions you might have.

Thanks!

It seems you are not local to ATL, @Sanjeev Advani but I just saw the former CVS drugstore at the corner of Alpharetta Hwy9 in Alpharetta turned into a showroom for high-end golf carts. I bet you did not have that one in your bingo card...

@Jamie Bateman I agree that a listing-only alternative is likely insufficient. Zillow itself is diversified across multiple revenue streams (Zillow Premier Agent, Zillow Rentals, Zillow Home Loans, and data APIs). A competitor would have to take transaction fees (as Paperstac is doing today), but could also find revenue streams in aggregating and selling anonymized market data to institutional investors or researchers. Or offering personalized consulting, deal analysis, or portfolio review for an additional fee (as others are doing today).

Your comment makes me wonder if we have a "chicken and egg" problem in the note-investing market. We are assuming the market size is inherently small and fixed. However, the market's current size could be a result of limited accessibility, rather than limited interest or potential. Lack of user-friendly platforms to facilitate transactions could be artificially constraining the market. In many industries, the introduction of accessible platforms has led to market expansion by lowering barriers to entry. For example, stock trading became more widespread with the advent of online brokerages.

It might also be possible to attract new participants who were previously unaware of (or intimidated by) note investing. If you make transactions easier, there is potential to increase volume by providing better information and transparency, making the market more attractive.

It makes me wonder if we have a self-fulfilling prophecy here. The belief that the market is too small could be preventing investment in the very infrastructure that could help it grow. Your thoughts?

Thanks @Chris Seveney and @Jay Hinrichs. To summarize:

The note investment market is a niche, relationship-driven industry with limited overall size. Its "cash and carry" nature and reliance on personal connections create significant barriers to entry, especially for individual investors or newcomers. This structure explains why institutional players dominate - they likely have the capital, connections, and infrastructure to operate effectively in such an environment. The small market size and relationship-based transactions make it difficult for new or smaller players to participate, which aligns with the earlier observation about the lack of services for individual investors.

Overall, this market seems to present challenges for growth or democratization, as its current structure favors established, well-connected players with significant capital. Any attempt to expand or change this market would likely need to address these structural characteristics. 

Put differently, it feels ripe for disruption. 

Brett Burky's contributions to Paperstac and the educational content he produces are are unquestionably valuable. That said, it's surprising to see a lack of diverse competition in this space. In the real estate SFH market, we observed multiple platforms like Zillow, Redfin, Realtor, Trulia, and Movoto - each offering unique user interfaces, features, and experiences.

So why doesn't the note investing market have similar variety? Where are the competitors offering different UI experiences, third-party API integrations, mobile apps, and other innovations? It's puzzling that this market appears to support only a single dominant player. 

Any thoughts?

As I like to say: Your job won't be taken by AI. It will be taken by someone using AI.

Thanks for the fantastic feedback everyone. I greatly appreciate it.

I contacted a broker about two mixed commercial/residential units being sold individually out of a portfolio of 15 properties. I asked for a T-12 for the properties and was told: "I do not have a profit & loss report for these properties as these properties represent a small chunk from a larger portfolio. We do not have each property broken out individually."This is a huge red flag to me, expecially as it appears the seller is also the property manager. I cannot understand how a P&L would not exist in some form for each property, or at least monthly operating statements or a pro-forma. This is not a mom&pop shop where you might find bad bookkeeping.

I don't see how any lender underwrites this in the absence of data. Has anyone run into this before? How did you mitigate the missing income and expense data? Thoughts?