All Forum Posts by: Rick Bradd

Congratulations!

"I think I will start taking up a pity collection on this"

I will kick in a few beers, hows that sound? Maybe at the Demo Party when you finally take possession????

Rick 

Hey Steven, welcome to BP, this is a great site to learn from and network, make connections etc... I love Salem ( was raised there ) and I think you can do well there in the blue collar areas especially.

Good Luck!

Rick

If I were Bill i would insist on a promissory note AND a first position trust deed, the promissory note and deed need to be in the name of Bills SDIRA custodian for benefit of Bill's IRA and the note needs to spell out the terms, rate and period.

Bill's custodian will have a direction of investment form, he can call the custodian directly and ask what they will need and the EXACT name and address their underwriter is going to demand, for instance EAGLE TRUST LC FBO BILL'S IRA, I had one kicked back because it was addressed to EAGLE TRUST LLC FBO BILLS IRA. they will also tell Bill what they want as far as the Note and deed, make sure it gets recorded too. You will also need to give Bill your wiring instructions for your bank and work out any draw schedule.

No offense, but this is not a good investment for Bill, the LTV is way to high and you have no skin in the game, i would not do this loan, but maybe Bill is more trusting, good luck.

Rick

@John R. 

It's working out very well for me, and it looks good moving forward. I have done several loans so far and expect to continue.

Thanks for asking,

Rick

Its to bad you can not counter sue for lost rents, and other holding costs like the property taxes and insurance premiums. I would bet the guy has no assets anyway and the cost would not be worth it, but it might make you feel a little better. At this point though I am sure you really just want this to end, can not blame you for that.

I guess this just means your a decent guy, not everyone would have the patience you have shown. I do not even have a dog in this fight and I want to kick his Lawyers ............

@Bill GulleyNow, besides the newbies, I'll address the more mature who have been successful in other business ventures, those who have made some money. While they may have been dealing in any profession, I'll just pick one. So, you're an engineer and you want to buy notes or be a lender because you have the funds to do so. I know, those of use who have been successful can be arrogant, you're intelligent, your self esteem has no bounds, one reason you were successful."

This is probably descriptive of myself, so let me defend these guys for just a second. Since we have had life and business experiences it makes sense to grow our knowledge base. This does not mean we would fall for get rich quick schemes or other shiny objects. However, when presented with an idea, or thought, or example that sounds interesting it would make sense to investigate, weigh the risks, and explore the challenges. So with that thought in mind we could use any number of examples in any field of trade, but the bottom line is the same, does the risk involved in an investment make the reward worth it? I for one have been exploring real estate for some time, and has discovered I do not want to be a landlord, it was not for me. But I like the idea of an investment secured by real property, which naturally lead me, and probably others like me, to look at notes.

So, for me, I want to know how something works and if I should move forward with the idea or not. I am pretty sure with the proper tools and manual I could rebuild a transmission in my car, but the risk of making a mistake far outweighs the rewards, so use a professional mechanic, get a warranty and be secure knowing you made a good decision.

My point is, we are not all trying to fly the jet, but do want to ride if its safe and makes sense. So keep teaching, and sharing, it helps us, but don't rain to hard on the parade, and remember that most everyone who wants to learn something these days has to "google" the topic, thats how the Guru's set the hook. And Dion, the cookies analogy ROCKED!

Ok, that was my rant, and if You do write that book I will buy it, then you can explain it to me. I was also going to write a book too and title it "Humility and how I achieved it". ( I stole that, not sure who to credit ).

Keep up the teaching please, I for one benefit.

Ah, ok, good to know, I had a slightly different understanding.

Thanks again for the information, I think I will focus on 1st position notes moving forward. But I did learn a lot about 2nd position notes from this and other threads, kudos to all who chimed in, I certainly appreciate it.

Rick

This is a good thread, I am enjoying this and learning some too, thanks all, especially @Dion DePaoli and @Bill Gulley I have taken some good notes ( written, pun intended).

I have one more question then I can close this chapter and move on. Dion you stated;

"There is also a notion of legal battle, the second does not want to waste money (if they know what they are doing) so they will stay their FC process when I begin mine. So, default then reinstate. Second stays neutral with no ground to really earn. If they re-file, I re-file. I do not need to race to the steps they do. So, if I can stay a good jog behind them, it really drives down their value propstion of finishing their action."

I had always thought/heard the phrase "first in time first in line" to mean if a foreclosure is started the party starting the process could be paid out of the proceeds,  say if the property were sold at auction? I have dug around and can not find a specific thread where this was discussed, but I know I had read it.

Could you expand on this for me?

Again, many thanks to every poster, this is good stuff.

@Dion DePaoli @Bill Gulley

Excellent information here, thanks for the education. I personally know from email exchanges with Dion how he feels about non performing seconds as we have chatted about them. And as Jay mentioned above, the attraction may be the low barrier to entry and the perceived upside.

Not to hijack this thread but there is a lot of information "out there" about NPN 2nds, both pro and con, it is important in my mind to understand the process, workouts, exit strategies and Possible traps of any investment, whether it may be RE or stocks etc. So again thank you for the advanced education, as I am very interested in the note space.

So here is a question, my initial thoughts on NPN 2nds were any mortgage lien could survive bankruptcy, and with home prices recently recovering somewhat, a homeowner that was underwater before, may now be in a better place to sell or refinance and would have to make the 2nd position whole before they could do that, is that correct?

And If the homeowner had kept the payments current on the first this would indicate to me they wanted to stay in the home, at least until it had rebounded. So if you bought a NPN 2nd at a discount and made every effort to get it reperforming and failed, the lien would still "live" and be accountable at some point unless it were wiped out by the a court order or first foreclosure etc.? The title abstract would show the lien that you own and the title would be clouded until it was cleared, correct?

So if the average homeowner moves or refinances once every 7 years the odds are good that while your cash flow may be non existent, the UPB on the second would still be your security? That lien would never just vanish, correct?