All Forum Posts by: Michael Rosenson

Great idea @Tracy Z. Rewey !  I'm new to note investing so some "real deals" practice is exactly what I'm looking for.

Some initial questions I would have:

1) What business is the buyer in?  I think that's an important consideration that would have an impact on the purchase price because a riskier business venture = a less stable tenant = greater discount in price.

2) Speaking of the price, I'm curious about how it was determined. Was it just the seller's ask? Did the buyer counter? Is 90% of UPB more of an art or a science?

Looking forward to the next 11 posts!

Hello!

I was wondering if people wouldn't mind sharing old note tapes that I could use for (A) practicing some due diligence, and (B) determining which states have a steady supply of notes (I am hoping to incorporate this information into my existing State Analysis to help narrow down to my list of 3-5 states to pay close attention to--no point in having a state on my list with no supply!). 

I am primarily interested in performing + 1st positions, but if you're willing to share NPNs and/or 2nds I'll take all the practice I can get!

Thanks so much!

Michael

@David Piqueira Your strategy/approach is the same as mine!  Slow and steady wins the race.  Plus, if a 15% return really is feasible for performing notes, that's double the long-term historical average stock market return--not too shabby!  

It's easy to get drawn in by the potential of big returns from NPNs, but it's important to keep your goals in mind too and, similarly, what kind of returns you need to be earning to reach your goals.  If your goals require you to "only" need to be earning a 12% return, then taking on additional risk of NPNs for a 20% return might not be worth it to you.  A lot of the financial podcasts I listen to (particularly Stacking Benjamins) emphasize this mindset.  They claim that people too often just save or invest without any idea of how much they'll really need to reach their goals.  The argument is that if you work backward from your goals, instead of just saving/investing without a plan, then you can (hopefully) come up with an intelligent plan and increase your chances of actually reaching your goals.  

Good luck to you!

Got some advice from @Wayne Snell to buy NPNs in an LLC and performing notes in a self-directed IRA (if possible, given that it takes a while to build up funds in an S-IRA due to federal contribution limits). My guess as to why the difference is that LLCs probably provide better legal protection, which is likely worth having for NPNs in case you get into litigation with the borrower.

Hope that helps!

@Steve Hodgdon Currently notes, followed by real estate once I'm ready to move (with a plan to "house hack").  Looks like I need to update my profile!

No mentor or accountability partner yet, although I've started networking and making some connections in the industry so hopefully those will continue to flourish! I plan on attending one of the note conferences (either Note Expo or Paper Source depending on if/when I can get the days off work) to develop even more of these relationships. And there's a local REIA meeting in my area this week that I was planning on attending that I've been looking forward to for a while so hopefully I'll enjoy it!

And with respect the guys with the Teslas, I'm more interested in financial freedom than shiny toys--to each their own!   :)

@Sandy Uhlmann Agreed!  I just read it this past weekend.  Definitely helped give me a list of considerations I need to think through before investing in a note.  While Josh admits that the list isn't all-inclusive, I think it's a great start and will provide a solid foundation for the beginning note investor.

You mentioned that you had also read some other books--doesn't sound like you were too crazy about any of them but would you recommend any?  Or do you have some more that are on your list to read soon?

@Christopher Winkler I just updated the original post to specify.  Although I'm interested in rules of thumb for all note types, let's start with 1st (senior) lien NPNs and work from there.  

@Account Closed thanks for the suggestion.  Out of curiosity, do you have a different lawyer and servicer lined up in each state that you buy notes in or is there any overlap?  Based on what I know about law, I would anticipate you need a different lawyer for each state since they need to be licensed to practice in a given state.  What about servicers though?  Is it the same kind of thing?