All Forum Posts by: Nate Crump

I am not yet discouraged, but as I read about buying notes I seem to find mostly information with a slight negative twist to it. I am 100% sure these members are trying to help gung-ho newbies such as myself, avoid the sting of regulations, SAFE Act, etc., but I get to the point where I ask if it may not be the best route for someone with a small chunk of capital they simply want to invest into their own retirement.

As an example, I am curious if it is important to know ALL the laws from ALL the states? There is a current thread mentioning how if you buy a note in Georgia, you have to have a license there.

Well, I was getting prepared to buy some notes in the near future from someone like PPRnoteco. (Dave seems to have a great reputation), but I worry I could get stung by purchasing a Georgia note and not knowing this law as I live in Utah. Do I need to research all the laws of any state I am looking at?

Or what if I have a note, and the home-owner needs to make a change? Maybe you decide you want to re-write the note, but does the SAFE Act not make that possible anymore, even if it is something you wanted to do to help the home owner, ie. lower an interest rate or something. Can you even contact home owners, or do you need to be licensed? I do feel I've got a bit of mixed answers on things like these.

To be honest, I see two groups of very well established people in the notes forum: One group that mostly deals in the hell you could find yourself in if you do something wrong, and a second group that almost seems to be saying, 'don't overthink it, just do it. It's not as bad as the first group makes it sound'. (I am appreciative to both groups for the advice they are sharing).

Anyway, I don't have any particular questions, other than just being curious if any other new, would-be note investors are feeling this way and if anyone has any opinions on the matter.

Has anyone gone to this convention in the past, and is it worth it? I'd love to learn more about notes, but want to ask if those who have been there felt it was worth the time/money?

For me, it's a 5 hour drive, a few nights in a hotel and the convention seems to be $500. It's in two weekends, and actually I am already going to Las Vegas next weekend, so I'm kind of factoring that in as well.

Anyway, please let me know if you have any experience with this conference. Thanks.

Rafael Floresta Thanks for the info. So if I'm understanding correct, on a personal residence you can deduct interest and property tax, while on a rental you can deduct interest, property tax, depreciation and of course some other cost that I won't worry about right now. Is that all correct? Yes, I'd love to take you up on your offer to explain depreciation, if you don't mind. Your example using numbers was extremely helpful. Thanks again.

I'm not a home owner (31, have a couple good friends as roommates and pay $300 monthly, so it's hard to justify right now), but I've heard of both mortgage interest and depreciation being deductible.

I don't quite grasp the true benefit as far as what it does to your adjustable gross income, however, and was wondering if someone might share an example. Basically, I'm just trying to figure out if the benefit is miniscule, or hugely beneficial.

Also, I don't know if you receive both of those on personal residences and on rentals, or maybe only one of the two benefits on them.

@Tom Goans

I'm not sure I followed completely, and definitely don't worry about offending me on the subject; I don't think I have all the answers.

As far as stating that I think interest rates are artificially low, the reason I say that is because it seems to me there is one entity that is deciding what the base rate will be for all banks across the country.

I wonder if instead, if interest rates were left up to banks and the free market, would they maybe not be higher than they are right now, especially as competition has heated up a little recently, as far as home prices having gone back up a bit. I really don't know, but I don't see how one man, or one committee determining what interest rates should be for an entire country, can be a good thing. I also think it leaves a lot of room for an agenda of someone's to be brought into play. I'd be interested to know what you, or others think.

Just thinking out loud here. I hear comments along the lines of, "jump in while interest rates are low/before they go up" all the time. I was wondering what the effect would be if they go up.

Always having been a huge believer in the invisible hand of economics (Adam Smith), and believing that Joe/Jane Home Buyer buys a home based on what they can afford monthly, it makes me think home prices would follow interest rates, maybe almost to scale with a few hiccups here and there.

If a family can afford $1,000 per month and can get a 4% interest rate, they might get a $200,000 home, give or take. But if down the road interest rates were, oh I don't know, 8% or so, they would maybe only be able to get a $130,000 home.

I don't think incomes would quickly and magically go up with interest rates, so it leads me to believe that over time, home prices would have to adjust and that $200,000 home would have to make its way toward $130,000.

I understand this is a very simplistic way of seeing it, but I wonder if any have any ideas?

It mostly makes me think that in all honesty, it wouldn't be the worst thing in the world for investors. Maybe a different type of investor would benefit, for sure. Those who can buy homes with cash. Especially if interest rates went back up to those mid-teens levels that I hear they were at in the 80's when I was just a kid.

Or, maybe there is still room for financing rental properties, and the fact that an interest rate jumps over a period of time from 4% to 8% or whatever, is countered by the fact that the price has dropped 30%, or 50%, and you just have to put a little more down up front, and there is more incentive to pay it off quicker rather than go get property number two.

I'd love to hear what some people think. As a disclaimer, although I have no proof, I actually believe whole-heartedly that some people simply think rates will go up, because "what goes up, must go down", and vice versa. I personally don't see why rates can't stay artificially low and suppressed by the Fed for decades to come, seeing as even the government is addicted to cheap money, and can't afford a rate hike on their massive debt, and the Fed is deathly scared of housing crashes, and inflating our money into oblivion is part of their plan.

Thanks. In retrospect I'm embarrassed of what I thought it was, as now that I sit down and think about it, that could have meant tens or maybe hundreds of thousands over the life of a loan. I was about ready to get licensed!

Ky Sharp what does 'two points' mean when talking about a mortgage broker? I was imagining a bank offering 4% interest, so you paying 6% after the broker's fee, is that right? If so, how does the mortgage broker get paid? Monthly from the bank when the mortgagee sends their payment?

Bill, thanks for the info. I will definitely consult an attorney on this. I don't mean to harp on the same question, but just to be clear, when you say I would need a license to deal in mortgages are you referring to things like working with investors and/or brokering of any kind, or are you even referring to one guy, buying non-performing notes for his own retirement portfolio?

Because I have intentions of being the latter. No investors, and no buying pools for the purpose of selling them off. Just buying some notes for myself. Thanks again.

@Dion DePaoli I appreciate all that info. On one hand it sounds complex, and I keep thinking about how I've heard a few people in this forum mention that if you are new to real estate (I am), notes is probably not the best place to begin.

On the other hand, some advice I keep hearing that makes sense to me is to pick a niche of something that really excites you and stick to that one thing and master it. Buying notes in this fashion REALLY sticks out to me as something I have interest in; much more so than flipping or wholesaling or rentals or anything like that. So I think I'm going to keep moving forward, learn for a bit, and then as I've read @dave van horn say, "notes are a 'learn by doing' business", so I'm going to see if I can pick up a cheaper pool some time soon, after setting up an entity with legal help, and then give it a go!

@Joe Gore I appreciate your words as well, thanks for those. BTW, are you a broker that sells notes as well, or just invest in your own? Not sure if it's appropriate to ask someone to mention their services/companies here, but I was curious.

Edit: My @ things don't seem to work after the first, is that normal?