All Forum Posts by: Zachary Taylor

@Mike Landry. Ya, definitely seems people don't want to disclose where they get their notes. Understandable. Will have to figure it out myself the hard way which I'm ok with.

Thanks for the response and book recommendation. 

Also, need to educate myself on costs of holding NPNs. Foreclosure costs (for each State), length of foreclosure process per State and which State's are viewed as more favorable to by NPNs in. On the surface a deal could look great but all the added costs, etc could make it go south quickly. 

Z

@Justin DeCamp. Thanks I'll get the book today.

@Chris Seveney. Thanks Chris. I'd definitely be open to doing a JV deal... I learn better by just jumping in and doing.. Any takers on BP? :-)

Ha! Thanks Jay. Just want to be a sponge. A better way? Got to learn it all somehow.

Hello Fellow Notes Folks!

New here and thought I would introduce myself. I am 33, worked in finance for past 10+ years in various roles including private equity, LBOs, M&A, credit, etc. However, I have not had professional experience originating, buying and managing my own notes, which is why I am here.

I'll get right to it. I want to get started by buying one institutional NPN. Looking to spend less than $45k for my first go at this. Open to ideas here!

Buying the note: I have signed up for Loan MLS, PPR and FCI. Are there other online resources to find notes you all can recommend? How does the borrower know to pay you now? or is that handled automatically?

Due Diligence: I have done a lot of it in my day. What are key numbers based factors you all look for on NPNs? Number of recent payments? % of UPB? Do any of you use third-parties to help with diligence and reviewing collateral files? If so, which providers?

Service Providers: What services do you all use to manage a note after the purchase? Lawyers, services, appraisal companies, agents, etc? Who do I need to line up prior to a note purchase?

Loan Mod: I hear a lot of talk about Loan Modifications to get the loan performing again which is my goal. I hope to never have to foreclose. How does the loan modification process work? Is it me who is calling the borrower to work something out? I'm fine with that just trying to mentally prepare for everything. I assume a lawyer drafts the loan mod and gets everything documented?

General Questions:

Range of legal fees, service fees, due diligence fees, etc? How much is third party service fees does one NPN go through? What is the cost to foreclose (ballpark / high level numbers are great)?

Typical time from purchase to loan mod and getting it back on track?

Historical loss rates on NPN's? Any data out there?

Education: Are there any case studies out there I can read? Generally I'm looking for educational info on how people find NPNs (I know I know, networking blah blah. But I just want to do one to start), what diligence they do prior to buying, how they are managed and process for how they are modified and sold. Anything you all you think would help me get up the curve would be AWESOME!

Please PM me any time.

That is all!

Zack

I'll PM everyone who responded and asked for one. Getting late. Will do tomorrow. Thanks for all the replies!!

Thanks Patrick. I'll take a look. Chris, deals I look at range from $100k to $2-3 million. I'm looking for a decision making tool, something I can input rents and expenses... projected repairs... something that shows the ROI, IRR, cash flow etc.

...that they would be willing to share?! I could build one but thought it would be nice to see how other, more experienced investors model the financials/transactions. Thanks!

Zack

Forecasting real estate partnership financials and taxes for all the individual partners. This would be a typical GP / LP structure. 

Trying to forecast financials for a GP / LP type partnership where several properties would be acquired with multiple LPs. Any help would be greatly appreciated!

Zack