BiggerPockets

I am having trouble with the note buyer's doing a bpo on the property and it not coming in any where close to the appraisal. Does any one have any advice?

Thank you Mark for the response. The property has been completely updated and there is three comps in the area within one mile of the property. I have also sold 6 properties in the area around 80 to 85 thousand but those don't show up on the MLS for the bpo's.

What kind of BPO? BPOE or BPOI?

Laurence,
Thank you for your response. I Don't know a lot about selling notes this is the first one I have done. If you will, I will send you a colleague request because I would like to talk to someone who knows a lot about the note buying business.
Thanks,
Kevin

Since equity and credit are the two most important factors in valuing performing notes, they are also always going to be a concern for investors that are pricing your notes. Each investor has their own way of determining the value of the underlying collateral and values have taken a big hit all over the nation. Credit is easy to check and down payments are easy to verify but, property values are hard for anyone to determine. Most all note buyers left in the market tend to lean towards conservative valuations right now because when all else fails, they now own the property and for performing note buyers this is the last thing they want to deal with. The golden rule in the note business is: "he who has the gold makes the rules".

As a broker, a smart thing to do is to look at the note as if you were going to invest your own money. Ask yourself, "why is this a good safe investment"? From there your job is to build a package (file) on the note designed to add value and make the note buyers job of pricing the note easy. Always, always, always; get a copy of the Promissory Note, Sales Agreement, Closing Statement and enough information about the payers to pull credit. Also you should investigate the values, look for previous appraisals, comps (as you mentioned) tax values and anything else that helps establish a value and include these items with your quote request if possible. A well prepared package goes a long ways and is certain to get your note noticed over and above the other notes submitted with bad info and or no credit or value information. Still the bottom line is that the value is up to the investor in the end and if they are not comfortable with the ITV (Investment to Value) they will find a reason to pass on the deal as any smart person would. If the value is there, help the investor see it in your initial quote request. If you honestly think your investor does not know what they are doing in determining values, find more investors. I would be happy to help you with this and wish you luck on future notes!

Ever list that i get direct from the bank has Original FICO and Current FICO. Unless your getting your listed from broker or another source that information should be on the tape as well. It should note take a seller 2 months to get back to you with any of the info stated above. And 90% of the notes i see trade with in a few weeks max.

Most of the time the banks goes off the Virtual Bank Appraiser which is way off. So they base their values on that fact alone. If anyone is a real buyer of NPL not a broker or just trying to learn more shoot me over a PM. Ill be happy to answer all your questions.

In my opinion it is an issue when the value does not hold up to the sale price but, if you can provide evidence to the contrary then present it to the investor.