All Forum Posts by: Patrick Desjardins

For further reference, we've rarely if ever received "payment records" from previous servicers except for the standard information Sandy already has. It's never been an issue with FCI, nor with FC attorneys, nor with borrowers' attorneys. 

Following the advice on this forum we would have had to sell them all back I suppose.

I would reconstruct the payment history using an amortization schedule and see if the numbers match. If they do, then that is my payment history. As agreed up to last payment date, and 0 every month since. If the borrower objects saying he paid XYZ months? Great, it was an administrative error, credit him for it and try to negotiate a win-win solution.

Kevin, those conferences are for newbies so no worries there. Typically you'll recognize the more advanced expos and conferences by the 1k+ pricetag. 

As Bob mentioned they are good places to build your network of vendors and meet other small to mid scale investors. Most of the people I've met at these events had bought 0-10 notes. So, great networking opportunities and you can ask people questions and referrals.

Don't expect to learn a lot though as it's usually 101 type content. There's only so many ways you can explain how to exit a 2nd mortgage current on the 1st with equity.

For a low tech, very cheap system use Twilio with OpenVBX. The 800 number will cost you $2 per month plus an amount based on usage. Since you're not going to have a lot of inbound calls those charges will be minimal. You can configure it to do all sorts of things like menus, different voice mails for different people etc. Don't forget to include mini-miranda type disclosures.

It really doesn't matter whether it's a government regulation or not. If you want to be taken seriously you have to build a professional infrastructure especially for things like these which have high visibility and low cost.

 This should no longer be the case since the BoA vs Caulkett decision. It supersedes the 11th circuit interpretation that liens can be stripped in chapter 7. 

That's why loans in Florida are a lot more attractive than they were just a few months ago - chapter 7 BKs are much easier than chapter 13s for the borrower. Now that they can't strip the lien in a chapter 7 BK, they have to complete the 3-5 years plan successfully which we know has a low success rate (~30% if I'm not mistaken)

That seems like a great opportunity. When communicating with them, lead in by mentioning you're not interested in using scare tactics about how they're going to lose their house etc like other investors do, and you're looking for a win-win situation.

This accomplished 2 things:

- Uses the same scare tactics but presenting it in a light that makes you the good guy

- Tells them you're looking for a fair deal that will benefit both sides.

In copywriting the "us vs them" angle is one of the strongest. In this case you're positioning yourself as the person's ally vs the evil investors looking to lowball him.

 Hey Paul,

Yes, it is entirely true that you can invest in notes out of state. You become the lender. You want to "hire" people in that area to help you whether it's an agent, an appraiser / BPO company, property preservation company etc. Of course if you can put eyes on the property yourself that would be ideal but it's not required. Also depends on which kind of investing you're doing. If all you buy is performing notes then you won't really need a team on the ground.

Hi Omri,

The costs are limited when the note is performing. The main cost is servicing which will be $15-30 /month depending on whether they're collecting money in escrow for taxes.

You're going to have a small setup fee with the servicer, a small fee from your document custodian for review and recording your assignment of mortgage (lower if you do it yourself).

To be honest a spreadsheet to analyze performing notes is overkill. There's just not a lot of variables to account for. I use an app on my phone ("Financial Calculators") most of the time to calculate TMV.

Mark, quick question, is the property worth $25k as you indicated in the 1st post or is it $35k like you mentioned in a following message? That is a huge difference in this case study.

I wasn't attacking you by saying the deal is "slim", I was just pointing out that on these low value assets the fixed costs ramp up fast vs the value of the property.

That is why I don't typically go for assets under 40k FMV - there's just not a consistent potential for profit UNLESS everything goes right (ie no long contested foreclosure, no break ins, no bad surprises). Most of the costs like foreclosure are fixed so the % expense is lower on higher value assets.

The deal is pretty slim but great updates. Even if you end up breaking even or making a small profit, the amazing thing is that you're learning a ton. Some people spend 10, 25, 50k on Gurus.. you took action and you're learning while doing.

 They do all the time, and that's why small investors can profit even with their limited resources. 

The asymmetry of information goes both ways - banks and hedge funds are dealing in large volume and very often loans fall through the cracks.

One of our most profitable loans was a 2nd mortgage (HELOC) that was in 1st position because the borrowers paid off the 1st mortgage. The loan was traded 3-4 times before we bought it and no one bothered to actually look at it. The borrowers called us days after we bought it and over time we negotiated a DIL, sold the house and made 300% returns (even more if you annualized it).

Anyone here who's been buying these junk assets probably has some crazy stories of borrowers lost in the system who were happy that someone (you) has their **** together and can help them. Their loan has been traded around for years and they don't even know who they're supposed to pay.