All Forum Posts by: Natasha Hunter

Hello Shay, 

I am a note investor that purchases non performing assets with the end goal being to help the borrowers get back on track and resell after we have seasoned the note. We purchase 1st lien residential notes for hedge funds and banks. If you are looking to learn there are a few sources to help get you started. Check out Scott Carson at We close notes. He is my mentor and the one who got me started in the business. He has a daily podcast and hundreds of Youtube videos where he shows you how to search for notes, conduct due diligence, and what to avoid in this business. Eddie Speed is another "guru" who can teach you about the process. I suggest reading BulletProof Title Due diligence as it goes through specific documents you may need and when you may need them. Its an excellent read. Dan Zitofsky also has a book called Passion to Prosperous that discusses the note industry and the strategy that he utilizes. Also join some of the FB groups such as the WCN crew, Notes and Bolts, and nationwide note buyers and sellers. These groups have so much information and everyone is willing to help. 

Do you work with note investors and understand our business model? I am looking for a CPA that understands this and it seems to be hard to find.

Hi Kent, 

- For the valuation, you will want to use a local RE agent. Make sure they actually go to the property by asking them to provide time-stamped photos. Otherwise, you may just get a basic CMA which won't show you the condition of the property. This is usually the hardest part of due diligence because agents don't want to waste their time working for no money so you can try to offer $50-100 for them to perform an exterior BPO. You can use a valuation company but their numbers are usually very generic so you could put yourself in a bit of trouble there. You can also have a company like wegolook.com go out and take photos to see if the property needs rehab but they won't provide a valuation.

- As for the terms, check with a real estate attorney who is in the state that you are purchasing the note in. You can have them perform a collateral review (usually anywhere from $100-300). Make sure you have an updated O&E report when you provide the collateral file. ProTitle is a great place to get one. They should be able to tell you if the note is enforceable with the state's standards. I would not use an attorney that is local to you and note in the state that you are purchasing unless they are licensed in that state as well. They may not know the in's and the out's to the state's requirements. The state also posts public regulations. A quick google search could help you identify the enforcement terms during your initial due diligence but you will want to verify before you close on the note. 

- For closing, first you will sign a loan agreement to determine what the seller will record, how much they will expect, exactly what you are paying for, and who will service the loan. Then you will wire the funds to the seller. In most agreements, the seller records the deed but this should be discussed in the front end. If you are recording the deed you can utilize a company like efile.com or you can call the county directly and ask them how you should file. 

-Note servicers need to be licensed in the state that you are purchasing. If you are staying with the current servicer odds are that they are already licensed in that state. There are some states such as GA that require the loan purchaser to also be licensed as a debt collector. Always contact an attorney if you aren't sure if you should be licensed. 

Hope this helps!

Chase is too large of a bank. They won't talk to you about a specific property or even one off notes. Normally when calling on banks for loans you would want to speak to the special assets or secondary marketing department but its not wise or a good use of your time to go after the top 100 banks. If they do sell they are going to want to sell in large pools (think $10 mil +) and not one-off notes. In this industry, you really can't pick and choose which loans you want by calling a bank and asking for the loan. You can only pick off tapes. Fix and flippers have been trying to call banks to get access to their pre-foreclosure list for quite some time. It always ends up being a waste of time. 

Most transaction fees I have seen are roughly 1-1.5% of the note. For servicing, As for servicing it ranges from $15-95  monthly depending on if it's performing or non performing and whether you elect to have escrowed taxes and insurance. Also keep in mind this doesn't include workout costs. I utilize Madison Management and they have a fees sheet you can take a look at on their website to see what some of your fees may be. 

Scott Carson is an Austin local with many years of buying, selling and teaching mortgage note investing. He is magnificent and host many workshops in Austin. Keep in mind however that you may need to purchase assets not located in "your backyard" as Texas notes are far and few and usually much higher priced. 

I receive messages almost daily from Hard money lenders looking to finance my deals but once I tell them that we could be in the deal 18+ months they quickly back out, You aren't always aware what strategy you will be exiting with and most banks/lenders would see this as too much a risk. There are too many variables. Notes are primarily both with cash. If you have a self-directed IRA you could utilize those funds or you can joint venture with an experienced note investor.

As Chris said, network as much as possible by attending both national and local real estate events. You should also contact asset managers frequently and more than once. I was taught by Scott Carson so i am a little biased but I found his method of teaching to be the easiest to understand. Dan Zitovsky also has some great content and just released a book discussing his methods. There are a few facebook groups that can help with questions. The best thing about note investing is that people actually help! 

Interesting perspective on how you do your books. Have you found many CPA's that know what they're doing in relation to notes? 

Contact the REO department or secondary market managers at the bank but be aware that a lot of the time they will not talk to you until the REO comes on the market.