All Forum Posts by: Roma Korenyuk

You cannot really "manage this", that is why you buy notes at significant discount. This way you have cushion to work it out and fix potential problems. As a note buyer, you cannot gain access to the property and cannot contact borrower. Everything you do to value the assets needs to be sneaky. There are many great tools, websites, and agents that can help you get as close as possible to the value. Don't forget, notes are an investment and every investment carries some sort of risk with it.

Also, if the house looks immaculate and manicured from the outside, then it is probably close to that on the inside and its maintenance. If the property looks like a crackhouse on the outside you should already be able to guess what the inside looks like.

@Marc Walowitz, You can flip the note without having to worry about paying off the 2nd. New note owner can pay off the 2nd, or have the borrower make a good faith payment that is equal to or greater than the 10% of asking cost to the 2nd. Then you can mod the loan to keep borrower in home.. Unless it goes to foreclosure, then 2nd will be wiped off.

This question doesn't make too much sense.

1. Have people agreed to pay you? have they made any sort of payment?

2. If they agreed to start paying again, why would you attempt short sale?

3. Is the borrower perusing a short sale now?

4. When you find out 2nd lien holder, you can negotiate wit them, because they will be wiped out completely in foreclosure if it comes to that.

Most counties will have a way to check it online use http://publicrecords.netronline.com to find website. You can also call the county and ask about taxes on the property. There are also paid services that can do that for you such as National Real Tax Tracking www.nrtt.com

One does not simply start buying notes and get profits. There is a lot that comes with understanding the note business. I would highly recommend getting educated first. After you kind of know what you're doing, you can start building relationships with sellers. 

So to answer how to find notes... Build relationships with smaller banks ( Brecht Palombo at www.distressedpro.com does a pretty good educational course on that ), call or connect with asset managers online through social media or using lists ( @Scott Carson has a very good note buying for dummies class at www.weclosenotes.com), you can also start a yellow letter campaign to people that have seller financed their properties, build relationships with hedge funds and note investing companies, and you can always try FCI exchange, Watermark exchange, and PPR.

3 take aways from 1000+ hours of working with notes, courses, blogs, mentoring, etc:

1. SYSTEMS in place

(do you have a workflow of working out a note?)

2. Taxes/Liens/Title 

(do you even own something or is it just a piece of paper?)

3. Collateral 

(is the house still there?)

Everything falls under those 3 points. The only thing that doesn't, is your own creativity.

Previous resident just moved out. We would like to sell the house with seller financing to someone that is interested in a quick rehab. Local agent said that ARV is $110,000. House need interior/exterior paint, refinishing floors, and some updating.

Built 1952, 1412sqft and 884sqft basement, detached garage.

I wouldn't call 2nd note a downpayment, because downpayment shows that borrower has skin in the game. Sounds like the early 2000s when housing market got ready to pop. What people did was got a second mortgage out for the downpayment on top of the regular mortgage. Then they became over leveraged homeowners with no money down.

I would go back to the investor and find out exactly why they want to do that. Sounds more like they want a good deal that they could sell later to another investor. Meanwhile renters are paying on your note back to you...

@Christopher Winkler, I'm not too familiar with 2nds, but when dealing with 1st position liens most sellers would consider 12-18mo of on-time payments as performing and will market it as performing.

A re-performing note would be a note seasoned for less than 12 on-time payments.

A under-performing note would anything that has missing or irregular payments.

@Samuel S. , I would not rely on what the seller is telling you, ever! Trust, but verify. I highly recommend that you use www.protitleusa.com to get your lien position and taxes checked as part of your due diligence. You need a professional service to check which position loan is in and what liens are ahead or behind the loan.

As due diligence on non-performing side of note business you need to check taxes, title, and property condition/value. The borrower is not a big part of due diligence on nonperforming side. But, you do want to know if there are bankruptcies or law suits or divorce in process with the borrower. That can be done on www.pacer.org