BiggerPockets

Investing in real estate? "It’s not about buying the real estate, it’s about buying the debt.”

I'm a private investor experienced in purchasing non-performing commercial notes (1st Trust Deeds) at a discount in order to get to the real estate. I buy off market notes directly from the bank, or owners.

The advantages of purchasing distressed debt over real estate are twofold. First the price you pay for debt is far better than the price you pay for REO. The second advantage is the multiple exit strategies you have when you own the note. You can structure a discounted payoff with a borrower, you can foreclose and collect on a guaranty, you can partner with the borrower, or you can sell the note to someone else.

My general process includes:

• Maintaining a constant flow of performing and non-performing first position loan pools from the FDIC and other financial institutions.
• Sourcing investor capital.
• Performing extensive loan file, market data, and on-site due diligence for each prospective loan and its associated collateral.
• Purchasing targeted loan pools at discounted values.
• Monetizing purchased loans through refinancing, restructuring, or a foreclosure and sale of associated collateral property.
• Targeting a prompt return of investor capital and an above market yield.

I'm always open to partnering with individuals on new deals.

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