All Forum Posts by: Tracy Z. Rewey

Originally posted by @Arnie Abramson:

Why don't you record the deed that you sent the buyer?

The challenge is they are unable to file the deed as property taxes are owed by the buyer and in Genesee County/Michigan property cannot be conveyed if property taxes are owed.

@Dan Nguyen An additional approach would be marketing to private investors and SD IRA holders that have bought notes that turned non-performing or they bought as non-performing and are tired of the headaches. Many of the notes sold as re-performing have a higher likelihood of going non-performing again (especially when less than 12 months of re-established timely payments). It doesn't work for investors wanting portfolios but it is a unique angle for one-off NPNs rather than going after banks and hedge funds.

Originally posted by @Doug Smith:

@Ali Langston I preach starting with a self-assessment of what you are great at and were you are deficient. What do you bring to the table (experience, contacts, money, etc). Once you can realistically do that, then surround yourself with really smart people who are experts in areas that you are deficient in. That's how I did it with my company. I had the contacts within the banks and hedge funds from spending 20 years in banking as an executive and I'm an expert in lending and loan collection, but I had little money to fund the operation and I didn't have investor contacts. I was stubborn and tried to do it all on my own. One of my old banking clients owns a National title company that does a huge about of closings in the investor world and he has tons of contacts. Once I joined forces with smart people with different skill sets, my business took off. many banks and hedge funds will sell one off to you if you know who to talk to and how to talk to them.

I was fortunate to have that banking background where my phone would ring several times per day with real estate investors asking me to buy my REO. If bankers only got one call per month, they might take the time to chat with them, but I used to get 5 or more per day. People also used to call the wrong people. They would call a branch manager. Although nice people, bank managers usually do not understand lending very well and don't have the authority to sell a note.

Here's another thing to thing about: Bank Asset Managers are given a portfolio of a finite amount of deals to work. The bank wants them to solve the problems and work through the portfolio to get them off the books by collecting them or selling them for an amount the bank would deem appropriate. Banks, however, are notorious for laying off good bankers once they no longer need them. Bank Asset Managers usually know this fact well, so you have to ask yourself "what is their incentive for solving the problems with the portfolio?" Why would they want to sell you their loans, whittle down their portfolio, and then be out of a job. It makes no sense, I know, but is the way banks work. The way to get into banks is to know someone, pure and simple.

Ali, I hope that helps a bit. I would find smart people to help you rather than trying to do it all yourself. Good luck, my friend!

I saw this topic pop up in my feed and realized your answer was from 7 years ago.  "Funny" it is still just as accurate today! 

Originally posted by @Codi Clausen:

@Jonathan G.

Hi! I invested with them last year. Feel free to message me for more information, but to be frank they just defaulted on their promissory notes to me.

Thanks for sharing your experience.  Did they offer any type of security for the notes that gives you some recourse?  I'll DM you if your prefer.

Originally posted by @Joshua B.:

@Mike Mitchell how about paying the taxes and in return getting a note/mortgage for the amount?

Advancing taxes and taking back a note with interest could be a good solution if it is all handled simultaneously. 

Technically the buyer on the CFD only has an equitable interest.

They won't get fee simple interest until the deed is recorded.

They can't record the deed until the taxes are paid.

The mortgage is a valid lien when the the buyer has title and it is recorded.

If @Mike Mitchell handled the advancement of taxes, recording of deed, and then recording of Mortgage all at once it could work.  I'd be curious to know what kind of tax amount we are talking and how delinquent?  

Hello Matt, I saw that as well.  The last email I received from them with a note for sale was mid- December. The two emails from Jan of this year mentioned registering for a new partner portal which appears to be property for sale rather than notes. Dave has bee a leader in the note space and it will be interesting to see where he goes with this expanded focus.

@Brent Wickersham I have worked with CFDs (aka Contract for Deeds, Land Contracts, Installment Contracts, Real Estate Contracts, etc.) since the late 80's. They have gone from being labeled the best thing since sliced bread to the evil tool of destruction used by predatory lenders. Like so many things in life, the truth is somewhere in between.

As mentioned here it varies greatly by state with some states making it as hard or harder to foreclose on a CFD than a mortgage. If you have a choice and are creating it upfront then the best course of action is usually using a Note and Deed of Trust (or Note and Mortgage if that state doesn't use the DT). If you are buying an existing CFD you need to know your seller. Just google: Harbour Portfolio contract for deed, and you will start to see the reasons behind the shift. There is still quite a bit of that inventory out there.

Do I still buy Contract For Deeds? Yes, depending on the state, the seller, and the paperwork. We have an expanded due diligence checklist we use for the CFD - with one of those being ordering title insurance (rather than just a report). You are taking fee simple title and that comes with inheriting some additional responsibilities (and potential transgressions of prior owners). You also have the legal obligation to deliver a deed and clear title once the buyer has paid the CFD in full. This is a greater obligation than just releasing your mortgagee's interest on a mortgage or your beneficial interest on a Deed of Trust.

We also work to convert them whenever possible. This gives the buyer fee simple title and creates a more standard set of documents. There are some institutional type investors on the secondary market that will not buy CFDs so the liquidity and price generally increase if you convert to a the standard DT/Mtge used in that state by traditional type lenders.

@Telless Cade I"m going to second @Terrence Evans and suggest you look into seller financed notes.  You are in Texas and Texas has been the number one producing state for owner financed notes for the last 15 years we have tracked the data.  It is much more friendly to new investors.  It is tough to break through to asset managers at the bank level when you just want to buy one note.  Not impossible but very hard. There are also institutional note investors that will buy the note and pay you a finder's fee at closing.  A good way to earn while you learn.

I have bought a Tax Deed (vs a tax lien) to control a property and then seller finance to create a real estate note. That was found through the county as mentioned by @John Underwood  I see the cost is $367 per month for the software you mentioned.  It would be good to hear from someone that has used it and felt the cost was justified.  I'll follow this post to see if anyone chimes in with feedback.

Thanks for sharing @Chris Seveney While finding a workout and repayment plan is always preferred over foreclosure it is an interesting situation for forbearance and then potentially eviction being mandated/delayed by the government without any solutions for the underlying cause.  Now is when our problem solving skills will be put to good use. I especially feel for landlords dealing with all the eviction moratoriums.  Makes me extra glad to be a note investor.