All Forum Posts by: Kevin Moen

@Jason Deck That is a pretty large variance between your families rent and $650, is the subject property in the same complex as your family? I put active craigslist ads over other sources to test the market. Have you run rentometer numbers at 4/3 3/2 and 2/2, you may find that the rents drop off as a 4/3 is far more valuable as a rental vs 2/2. I would make a list of Zillow, craigslist, and rentometer rents for the 3 property types above and look for patterns or more clear data to make your final decision. 

The other model that works really well in that price range, especially for someone looking for passive income, is to sell the house to an owner occupant on a contract for deed, or originate a note and mortgage. Returns are very similar with far less liability and headache. If you are interested in learning more about that route you can message me. 

Kevin Moen

@Trottie McQueenDo you own these notes? If not, what is your connection to the seller? 

@Gary Dezoysa Why not invest in a fund that invests in notes? That is the most hands off, most diverse application of a given capital amount. You leverage the managers time, expertise and connections, and spread your capital over far more deals than your fund investment capital could invest in alone.

@Jena Liberty Firstly, you can always buy a loan and board with a licensed loan servicer, so don't worry if you are not licensed to do so. Secondly, to Ken's point you should make sure the notes are Dodd Frank compliant if originated after 2012. 

The answer to your discount question would require knowing a lot more about the note. High yields are exchanged for risk. Note pricing is a fairly complex consideration, and all buyers have their own underwriting and metrics to price loans and assess risk. The questions you need to know to asses are: 

- UPB of loan, FMV of property

- Borrower credit score

- Borrower down payment

- Borrower pay history 

- Loan structure

- Interest rate and loan term

If you know that, or get that info and want a note buyers opinion of offer price, feel free to message me and I would be happy to help. 

Kevin Moen

I am a note investor, who hired an attorney to do a foreclosure on a property I hold a note on in NJ. What are you looking for? 

@Drew Slew If I were in your position I would buy a new place that would make a good future rental either with a conventional loan, or owner occ FHA. FHA especially if you can force some appreciation through repairs, etc and refi relatively quickly to drop the PMI.

This is a fairly loaded question, but let me weight in. Firstly, most real estate is not a truly passive investment. It required attention, managing a rental is far from passive, and your use of the income does not dictate if its passive or earned, the way you earn it does. 

With a rental property, cash flow is essentially profit. So if you want to build a portfolio of rentals and live off the net cash flow, you can and not touch your principal. Are you familiar with what principal is? Judging by your question, that may be a good starting point. 

Instead of real estate/rental, lets say you invest in a performing note (invest in a mortgage vs a piece of real property). Each payment consists of principal and interest. A disciplined investor will only "spend" the interest, and will reinvest the principal. Meaning re-invest the percentage of that payment that is going towards principal paydown, and the interest is your profit to do as you wish. 

Similar with a rental. Say you buy a property with a down payment and mortgage. That down payment is your capital contribution. If you were to refinance you would want to use all of the down payment (and a good investor would re-invest far more) into your next asset.

Hopefully that is a helpful start.

That percentage is completely dependent on the quality of note you are buying and your underwriting criteria. A loan with 18 months of seasoning and a 700+ credit score is a far different asset than a seller financed land contract with $500 down and 3 months of seasoning... If this is the question you are asking, you might consider getting a better education before investing in notes. 

I second the info provided above my post. I also know if you hire a licensed MLO to underwrite the borrower there is no limitation on the amount of properties you can seller finance within a rolling 12 months, and still be Dodd Frank compliant. Trump is also talking about doing away with Dodd Frank... He does a lot of talking in general though.

@Dana Yobst I sent you a DM, feel free to reach out and pick my brain. There are many ways to invest in a truly passive nature and make low double digit returns with a relatively low downside / capital protection through note funds, etc. We love note investing and the benefits that come from working with borrowers to modify loans and keep them in their homes, both from a social and financial point. Certainly a lot less headache and liability investing in notes compared to multi unit buildings! I would know, I invest in both.