All Forum Posts by: Konrad Utterback

Hi, I was wondering if anyone can give me some color on the operational steps involved in purchasing bundles of non-performing notes, in broad strokes.

My idea so far is something along the lines of

Receive list of non-performing loans offered by a bank, Freddie Mac/Fannie Mae, some other source.

Underwrite each loan to determine the price we are willing to pay, given the info provided

Submit bids on each loan

Purchase the pool of loans

Reach out to each homeowner, determine whether new terms, deed in lieu, or foreclosure is best option

Sell newly performing loans or foreclosed property

Do I have it mostly right? Am I missing something?

Hi, I was wondering if anyone can give me some color on the operational steps involved in purchasing bundles of non-performing notes, in broad strokes. 

My idea so far is something along the lines of

Receive list of non-performing loans offered by a bank, Freddie Mac/Fannie Mae, some other source.

Underwrite each loan to determine the price we are willing to pay, given the info provided

Submit bids on each loan

Purchase the pool of loans

Reach out to each homeowner, determine whether new terms, deed in lieu, or foreclosure is best option

Sell newly performing loans or foreclosed property

Do I have it mostly right? Am I missing something?

@Christian Wathne Didn't mean to imply that the properties would be in WA or CA. I said that I wouldn't be buying properties there because they're too expensive, and will be buying out of state. And yeah, I guess this isn't really a business plan, and more of just a general train of thought. 

@Vincent Pace thanks Vincent! I'm starting to understand that multi-family actually may make more sense than I originally though. 

@Patrick Britton thanks for the advice! I agree that I'm in a better position than most to leverage time for appreciation, but I think it would be foolish to make purchasing decisions banking on appreciation. For me, cashflow is king, and appreciation will be an inevitable consequence considering my time horizon. I'm hoping to put together a much more detailed plan once I really settle on my first step... still almost a tossup between SFH and MF.

@Ryan Evans, thanks for the reply! My FICO score is about 760 and I have no credit card debt... before learning about REI, I learned about credit cards. I agree that multifamily is a better deal from the lender's perspective, but just from a raw allocation of funds standpoint, they will likely be forking over a much larger chunk of cash that way, so that could make them uneasy. Could be totally wrong.

@Manolo D. Not 40-50k ARV, sorry. I mean 40-50k cost, so hopefully closer to 60-70k ARV.

Haven't thought to look in Vegas before, the markets I'm most interested in right now are Baton Rouge, Kansas City MO, St. Louis, and Dallas. Still definitely in the research phase, so this is helpful. 

Hi everyone,

I'm relatively new to bigger pockets and the world of REI in general. I'm going to lay out a very rough short-term business plan/set of goals, and would love your input! Please let me know if I'm missing key steps, or am misguided. Apologies in advance if this post is a bit wordy.

I'm 20 years old, and about to start my junior year of college. I have 0 debt, and about ~$8k liquid from various side hustles and internships. 

In the short term, I'm going to finish college with a psychology degree, and probably move to Seattle (where my family is) or LA (where I go to school). For a while, I thought I really wanted to house hack when I get out of school and start my investing career that way, but given that I'll almost certainly be living in LA or Seattle, this isn't really going to be an option for me... I simply wouldn't be able to find a duplex/triplex in any area where I would be willing to live for a price that I would be able to put 3.5% down on. 

With that realization, I decided to set a goal of buying my first deal before I graduate, and preferably in the next year. My parents are really behind the idea and offered to put ~$10k into the deal (probably as a personal loan to help with a down payment/rehab costs). I also have some wealthy friends, one of whom is a big deal in WA commercial real estate and would likely be willing to be a private lender on the deal, although I haven't approached him about it yet because I want to make sure I fully know my stuff first. 

So, my plan is to form an LLC (question: does it matter which state this is in? Should it be where I live, where the property will be, or Delaware?), find a SFR in the $40-50k post-rehab price range, make sure I have a bit of equity, do light rehab, rent, and refinance into a 30-year mortgage to get my private lenders out of the deal. Basically, BRRRR. Some markets that I find interesting are Kansas City MO, St. Louis MO, and Baton Rouge LA, although I've also looked at Cleveland and Houston.

I ultimately want to get into multifamily, but I think it makes more sense to start with a SFR as a sort of proof of concept, and to increase my likelihood of being able to get private funding.

Thoughts? Please let me know what you would do differently, or if there is something you would add.