@Dion DePaoli , yours is a great post, and one I am happy to address. I am a new note investor, however I've been a commercial real estate broker specializing in retail properties for close to 25 years. I've been involved in a lot of facets of the business These include the development cycle (i.e. planning a shopping center or mixed-use building with retail, leasing it to anchors & other retailers, watching it get built, and re-leasing space 10 years later) to reletting existing storefronts. I've also been heavily exposed to the finance side of the business, so I feel like I have PV, NPV, IRR and other rate of return calculations down cold. I understand time value of money.
I mention all of this only to provide a background, which has certainly formed my expectations of the note business. Here goes to responding to your questions:
What is attracting you to this asset class opposed to others? To use another well-worn expression, "no tenants and toilets" would be the primary reason. Lower-maintenance real estate ownership that draws on the experience I've mentioned above. The other motivating factor is the ability to buy a note secured by a property out of state. My goal is to transition from my Day Job into a "volume" business in notes--brokering, investing for my own account, raising "friends and family" money alongside my own to scale the business--and you can't exactly do that if you have to visit the nuts and bolts of every property.
What are the expectations that you have, think you have or may have heard in regards to the amount or level of return one can expect? 10-15% for performing, higher for NPN.
What is the amount of time a single investment will take or do you plan for? Or your general investment horizon per asset. Perhaps why that is your target as well. I don't need or necessarily want to "flip". I am willing to be patient. That means 3-10 years probably. Of course, if an opportunity presents itself to get out sooner, I'd take it.
What is the target amount of capital you believe you need or plan to work with or do work with? Minimum of $25K.
How do you believe you will exit your asset investment specifically? Perhaps a better way to say this is what is your most hopeful exist, highest best, as you know it. Selling partial, refinancing, brokering. I suppose I could sell in an exchange, but if I get into an asset--unless the you-know-what really hits the fan, or if I'm presented a good opportunity as I mentioned above--I'm thinking I'll be patient, and "let the market come to me".
How does that exit affect your return in your opinion? I'm not really sure how to respond to this question, frankly, since I mentioned several exit strategies above.
Now go ahead and shoot holes! I don't mind.
