All Forum Posts by: Natasha Hunter

There are quite a few exchanges out there. The best bet to get the best deal would be to look for asset managers directly. You can utilize LinkedIn to find specialty asset managers and then just start dialing for dollars. Try building up a relationship by contacting them on a regular basis. If you're just looking for online sources, Google Performing Note Sales and a small handful will appear. LoanMLS is another exchange similar to paperstac. 

I was a fix and flipper in FL back in 2013-2015. Inventory was getting super low and the prices started skyrocketing. My team and I attended a IRA event where they were discussing unconventional ways to invest in real estate through your IRA. Notes were mentioned but not really discussed. I started studying up on the subject. I then wondered upon Scott Carson's youtube channel and I could see how much potential this would have as cash flow. It also appealed to me that I could help someone stay in their home (my primary exit strategy) and still make money. It was a no brainer at that point. Don't have to worry about tenants and annual property maintenance.

@Gordon F. You mentioned scott Carson so I'm going to start there. He has a virtual note buying for dummies bootcamp that encompasses all of the questions you have. He will walk through each thing you need to do and how to get started. I would recommend the program. I took it when I got started. He also has a podcast and a ton of videos on YouTube. Also take a look at a book called bullet proof title due diligence. It goes over all the things you may run into as a note investor and is a quick read. Join some Facebook groups targeted towards note investors and start asking questions. You'll be amazed with how.much help there is out there.

@Chris Seveney I am looking to inquire 12 notes to buy and hold for the year and resell in 2020. I also want to purchase two properties utilizing notes and the brrr method

@Steve Holly I would find out if you're looking in an emerging market. What are the key industries in the area, what is the population, what has the market been doing over the last 5 years. What new infrastructures are coming into town. Look at the economic development website into the area. Realtors aren't allowed to tell you about crime so look on the counties page. Identify the range for rental profits.

@Andy Mirza I'm curious if you also factor in traveling when bidding on cook county. My understanding is they want to do business in person for filings and foreclosures or have you found a way around that ?

@Chris Seveney my list is very similar to yours. Ga due to debt licensing requirements Ny and NJ long foreclosure time Il due to cook county and also licensing requirements Wa due to licensing requirements.

You can use county records to find owners of secondary properties owned through their IRA. Mail to those clients about your business model.

Investment Info:

Single-family residence note investment investment in Kendallville.

Purchase price: $18,500
Cash invested: $23,000
Sale price: $35,500

Case Study of our Kendallville, IN CFD

Ironside Investments purchased this note in October 2017. This is a 4 bedroom 1 bathroom home boasting 1876 sq feet near the fairgrounds in Kendallville, IN. We had some trouble reaching the borrower at first. After about a month our servicer made contact and found out the borrower wanted to stay in their home. We came to an agreement in December for the borrower to make all the back payments in January which they promptly did. This borrower has steadily been making payments since January. The servicer handled all of the paperwork, borrower outreach and we collected the monthly payment. We recently sold our CFD after only a week of being on the market. Here are the numbers:

Original Loan Amount: $ 42,700.00
Loan Origination Date: 12/09/2013
First Payment Due Date: 01/01/2014
Last Payment Date: 9/27/2018
Current Loan Balance: $ 41,802.77
Current Interest Rate: 9.900%
Current P&I Payment:$ 371.57
Current Escrow Payment:$ 30.43
Maturity Date:12/01/2043
Term Remaining: 302
Loan Type :CFD
FMV: $87,500

The Workout

We picked up this asset for $18,500 ( 44% of UPB)

Expense Cost: $2000 (Includes, servicing, initial due diligence, forced place insurance, back taxes and misc)
Contingency Fund $2,500
All in Cost= $23,000

8 Months of Payments = $2968
Reinstatemet fee from borrower = $2000
Total Income received $4968

We sold this property after 1 year as a re-performer for $35,500 (Approximately 85% of UPB)

$35,500 + $4968 = $40,468

Total ROI = 76%

We're excited with how this one turned out and can't wait to see what we will do with our next one!

What made you interested in investing in this type of deal?

I love note investing as you don't have any of the responsibilities of a landlord but you have the security of the asset

How did you find this deal and how did you negotiate it?

I found this deal through a hedge fund. I initially offered $15,500 with my max offer being $19,000 but we negotiated to $18500

How did you finance this deal?

Through a Joint Venture agreement utilizing SDIRA funds

How did you add value to the deal?

I found the deal, conducted the initial and final due diligence and worked with servicers to come to an agreement with the borrower.

What was the outcome?

We got the buyer reperforming and collected 8 months of payments plus a reinstatement fee of $2000. After 8 months of seasoning, we sold it to an investor as a performing note.

Lessons learned? Challenges?

It may take a few months to get buyers to speak with you. Start sending out the foreclosure proceedings immediately as to not cause delay

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Madison Management Servicing Company.

If you are going to invest OOS I recommend having a great team of contractors, realtors, title companies. It may help if you visit the areas you are planning on investing in and interviewing at least 3 people from each category to make sure they understand what you are trying to accomplish. Also secure a real estate attorney that is specific to that area to run any questions you may have by them. Check with county to see if they require you to be present when recording a deed. Each state has their own way of doing things. For example here in NC buyers have to put down a due diligence fee on top of escrow. Talk with an agent to see what things might be different than in your state. Also what do market conditions look like now and projected in the future. Is the area you're purchasing in a good area or are there boarded up houses a few miles away. Check the population of the area you're investing in. Does it have fewer than 10,000 people or is it a metro area? That will help you determine how quickly someone may buy or rent. 

It is all possible but you just need to be very careful about doing your due diligence up front.