All Forum Posts by: Account Closed

Thanks for the help everyone. Sorry you had to learn the hard way Jay Hinrichs ! Bob Malecki and Wayne Snell if I may follow up, this is actually a performing Note (though in Bankruptcy and there is some other things I was not happy to find out about) but both of you have many properties or done many deals. Just to be clear you guys put forced insurance right on them even if they were performing? Also (and sorry for so many questions) is there a way to find out in the collateral file during due diligence if the house is currently insured? I know longer have a mortgage where I live but I have flood insurance. When I did have a mortgage I have gotten warning letters informing me that I have 30 days to show proof of insurance or forced place insurance would be put in place. Thanks again I appreciate it!

We just boarded our first note. My first question to the servicer was if there was insurance on the property. She said she doesn’t know. I asked “isn’t that one of the first things you look at”? She said the investor has to request it. I said that makes no sense that should be the first thing people make sure of, that our asset is insured. She stated that some investors don’t care as they don’t want to have to pay forced insurance. I found that absurd. So question is, is that normal? That is, do you have to request proof that the property is insured or should the servicer automatically do it? Thank you.

Great answers. Thanks for the input!!!

Originally posted by @Bob Malecki:

Hi @Account Closed not in some cases. Our fund is a 506(b) which allows for up to 35 sophisticated (non accredited) investors a 506(c) does not allow non accredited. Other exemptions allow all non accredited. Complicated stuff, which is what keep the securities attorneys earning their stripes. 

Thank you Bob. Yes complicated but I’m fortunate that though not an attorney my wife does this for a living as a compliance consultant. However she’s an early bird and I’m a night owl so I figured I’d just ask. 

Besides she always gives me these long winded official answer I don’t usually understand as a typical compliance person does but your answer was very clear. Thank you again Sir. Have a great night!

Bob Malecki don’t you have to be an accredited investor to invest in a Reg D fund? Thank you Sir.

Ok first I’m trying to get my foot in the door in the NPN space. No complaints so far; it’s not an easy get rich thing so just plugging away. I don’t understand partials but I came across something called fractional investing (I believe the term was) This is a little different than a note. It’s actually a first lien position on the property based on the amount you put in. So for instance say 6 people go in to lending $600,000 to a developer (these are all non occupied investment properties in Texas) and all 6 put In $600,000, supposedly all six people will have their name as a first lien holder on the property. It’s a lower return than what’s expected from a NPN but much less risk. The one I’m looking at is a development of a two story commercial retail center with a LTV of 45%. All borrowers must pass a criminal background check and personally guarantee the loan. Further should they not fulfill there obligation it’s Texas so foreclosure is fast. Exit strategy is expected payoff or refinance in 9-12 months. Reason I’m doing this is while I work my way through building my NPN business I don’t want to leave cash sitting in the bank not making money. ROI is expected to be between 8-10%. Sure not some of the much higher numbers that are available in the NPN world but better than what I’m getting now by far WHILE I continue to work on NPN as stated above. Just curious if this is similar to doing a partial? Thanks for any help.

Andreas Mirza yes I figured the same but he was talking about UPB of about $800,000. They might not have that. As for the RESPA violations, remember this is who the lawyers call in when they are fighting foreclosure. That’s why I jokingly called him “the devil”. But I’m new and any info anywhere is good for me. Thanks

@Alejandro Duque Any time! Best of luck!

Hi @Diane E. and thank you for your input. Well the one I mentioned, I haven’t met yet I just know his CPA (who happens to be mine too). What’s strange, well not so strange I guess is the guy doesn’t live in my state and doesn’t have investments here either. I asked why he used my accountant and he said his firm (a very reputable firm) is pretty well known for real estate deals. 

I will look up the info posted by Adam Adams. I’ve actually spoke to him once and he was a super nice guy and wicked helpful. 

Well I really detested the last business I was in (though profitable but way too many employees) I like this one so far but these first steps.... :)

Thanks again. 

@Mike Hartzog thank you Sir. This is what me and my partner were discussing. It does seem that’s what he was talking about. It just he said some other things I didn’t understand. 

Thanks again. Any angle that will get me in I’m going to explore.