All Forum Posts by: Richard Allen

I agree with Chris Erwin , if you're looking for performing notes Darren is man. If you need some help on the nonperforming side, I'd be happy to answer some questions.

@Marque Toliver The price of notes vary greatly based on the type of note (commercial paper, owner finance paper, ect) and performance (borrowers pay history). @Chris Eaker does a fairly good job of answering you questions, but I will add a little more.

1. figure out what yield you or your investor want to make and begin the offering price from their.  

2. FCI exchange is a good place to start.  I will make you an offer for the note. Private message me or email me and I will go over what I will need to make an offer. 

3. Selling a note varies a little from closing on real estate. It will usually be handled by an attorney or an exchange platform like FCI, Paperstac or Loan MLS.

4.There is a mortgage loan sale agreement (MLSA) which is basically the contract to sell the loan, an assignment of mortgage (AOM) which transfers the mortgage, an Allonge which transfers the note, and then the hello letters and the goodbye letters to the borrower.  The end purchaser of the note will need to either self service the loan (not recommended) or have a professional service the loan, like FCI or SN. 

5. when you are working on the transaction, there are several factors to watch for and we could spend an hour on the topic.  Main items I would look for:

- make sure seller is the actual note holder.

-you will want to review the credit file  looking at how the loan was structured and the collateral file paying attentions to the chain of title on the AOMs and Allonges.  

- review the borrower (1003, w-2, credit score)

- pay history

-verify the taxes and value of the house

There is so much to go over on the DD portion, it is the largest section in our course we teach.

A little on what to expect on pricing- selling notes on a one off basis like this, expect investors to want 12-18% yields, but they will also calculate their offer prices based on the value of the asset and the LTV. Pricing should come in at 75-80% of the UPB if it has had a decent soak in the seasoning pool (6-12 months).

I hope that helps. 

RA

@Aaron Fox

I will agree with @Paul Ewing.  I am both a real estate broker and a real estate investor.  I cant tell you how many countless deals I have purchased because I was a real estate broker.  As a real estate agent you have the ability to keep commission on properties that you purchase and sell.  If you are purchasing a $100,000.00 investment, that is $6000.00+ or 6% (3000 for the buy and 3000 for the sell).  6% saved is 6% earned.  Because of your savings, you can outbid another investor that is using a real estate agent.  

Another benefit is the ability to offer your side of the commission to a listing agent.  This strategy alone has encourage real estate agents to send houses to me before they are listed. 

Imaging the power of offering $150,000.00 on a house listed for $225,000.00 and giving up your side of the commission to the listing agent.  In the listing agents mind, they are calculating their paycheck the minute they get the listing and they are thinking it will be 3% of 200k to 225k or $6000-6750.  If they submit your offer of $150,000.00 with the potential to get a 6% commission, they have calculated their commission at $9000.00. 

Note Force Academy

Cloud Capital Management in winter garden FL and you can list the notes on Paperstac.com very shortly.

http://www.marketwatch.com/story/forget-flipping-houses-these-investors-flip-mortgages-2016-04-11

The Property is currently under contract, I will let you know if the current contract falls through.  

Debra Richard FCI is a great trading platform. I started buying in the site about 4 years ago and still utilize the site today. We are launching a trading platform in January that will have a lot of bells and whistles to go with just buying notes. Following the launch of the trading site, we will be adding a management side along with a trading simulator. The simulator will allow you to run through the course of buying a note, working the note, and then exiting the note. It should help out new folks in the business a lot. With regards to Eddie Speed, if you can afford the course, do it. I was investing in notes for about 18 months prior to becoming a mentor student and doing so has changed my business. I made back what I spent in the first 60 days. You are going to pay for experience either by paying for a mentor, it by trial and error... Take your pick. You may get by without losing any money, but you will get down the road much after with the help of a mentor. For the record, I do not work for Eddie Speed or his group. Good luck

@Bill Gulley would the use of a licensed servicer or and RMLO side step the need to be a mortgage broker to handle workouts?

I use both Evernote and podio. Evernote is great for putting in notes, also if you have PDFs stored in Evernote, you can search words within the pdf. Podio is a monster of a program, it can handle a lot of your stuff. I have quite a few apps that I've built for wholesaling that may be of help to you.