All Forum Posts by: Logan Hassinger

Safeguard sets up the paperwork and then depending if you're doing a self directed IRA or a solo 401k, you'll have Kingdom Trust as your custodian or you'll act as the custodian.

In either case, you’ll open an account with your preferred bank and have direct access to placing the funds rather than having to send in a request to the custodian to send the money to your preferred investment. 

@Andrew Neaville

I would also calculate your return with just the interest received over a 12 and 24 month hold. I’m not sure what your exit plan is (hold till maturity or sell in a few years) but I try not to hold loans that are in their 2nd half of maturity (ie 20 year term but in year 10+ of amortization). The reason being is now the P&I is now more principal than interest. 

@Richard Miller

I’m here in the DFW market (mid-cities area), if you would like to connect some time. 

@Edgar Coronado

I wouldn’t say sourcing notes is all that hard, it’s just a matter of your relationships and connections. For someone new, sure there is going to be a ramp up period, but many note investors are only buying 1-5 a year. Someone like me, who runs it as a business is buying 50+ year. So it’s my job to continue to source notes. All I’m saying is it isn’t hard to do. 

I would also say note investing is far more about how “good” you are with due diligence and less about the exit strategies.  Now of course you would want to model out the various scenarios and identify a price you can pay that makes sense, however non of those scenarios will have a chance to play out if, for example, you bought a note that has sold at a tax sale and redemption period ends before you claim and redeem the taxes.  

Any new note investor should read Bulletproof Title Due Diligence as well as understand the laws in any state you’re buying in. 

@Jeff Copeland

Typical spread is 6-8%. I’ll borrower at 6-10 depending on the deal and time commitment, and will in turn earn 12-18% on performing notes. When it comes to nonperforming, it’s the same borrowed rates but higher returns for my company. 

I’m rarely purchasing nonperforming to own the property. With that said, I don’t purchase a nonperforming or performing note on home I’m not willing to own, if it comes to that. 

There are note deals that make sense to go after to take the property, which I’ve done, however that’s not the primary goal. You’re right, there isn’t an interest rate spread I’m earning in this scenario, it’s simply the net earnings after principal and interest is returned to the private lender. 

@Bradley Ritter I sent you a PM a few days ago. 

@Victor Ong

I utilize paperstac, a broker as well as my own efforts (listing my available through my website) to sell. 

Purchasing Notes is a whole different strategy. 

@Chris Seveney makes a great point on partials. A great underused strategy IMO. 

@Robert Harpster 

While paperstac is a great source for one off’s or even a small pool purchase for what I call, retail investors (by no means do mean that in a derogatory way; simply referring to note investors note businesses ), it can’t be our only source. 

I work with a few excellent brokers and directly with regional banks. I also occasionally buy from owner financiers as well. It’s takes many sources to run a note business/note fund. 

To answer your question about pricing and inventory, I agree with @Jamie Bateman, as that has been our experience as well. When this whole pandemic got started in March and widespread stay-at-home orders where put in place, my phone was ringing off the wall. However those phone calls rarely turned in to seeing some actual product because I alway make it a point to discuss pricing first (no sense in running through a few hundred notes and pricing is way off). The sellers were too close off the heels of 90% of UPB or more on performing/scratch and dents. The nonperforming was being traded at 70-80%. Still no margin in it.

If and when inventory with realistic pricing does pick up, I believe the timing is 12-18 months from now. It just takes time for these things to unfold. It’s not the stock market with massive shifts in a week or months time, hell even in a days time as was seen in March/April. 

@Bradley Ritter

Happy to discuss off line. First need to make sure we are a fit. I’ll send you a PM. 

@Jeff Copeland

It’s not odd at all to use a private lender to purchase debt. I do it all the time to acquire both performing and nonperforming notes. The reason someone is lending is to be passive in nature regardless of the end investment vehicle. Sure, the private lender needs to understand who and what they have lent on and be provided some security, but this happens all the time.

@Bradley Ritter

Funds come from in 2 types of sources; private lending, JV's. I think your question is do you go about finding private lenders. That's not an easy thing to just jump and start raising hundreds of thousands of dolllars to fund note purchases. They stem from relationships that have been ongoing for years and is built on trust and execution.