Performing Note Broker Contract

Portland, OR · Member since 2019 · 16 posts · 1 vote

I am interested in purchasing performing notes from a hard money lender, so I've been trying to do my diligence prior to simply handing over money.

However it seems a little more difficult to get a level of comfort with the folks I've been speaking with than I had expected, for example I have requested a sample of the contract up front so I can ensure I have recourse in whatever state the lender is investing in and I either get some hokey word document that really says nothing or I simply get a "No I'm sorry we don't do that". Am I missing something? I have never purchased performing notes before so I really could be missing something but I keep hearing that voice saying if 12% - 18% ROI seems too good to be true it probably is?

Thoughts suggestions recommendations?

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

careful on new origination over 12% in todays market anything higher is usually priced for risk.

Not sure what contract your looking for.. the Note spells out the terms.. deed of trust recorded secures your interest.

if you need a personal guarantee from borrower thats done in a separate document..

you can ask to review a sample note and trust deed and P G .. other than that there is just borrower info.. credit score net worth that type of thing.. you may also want to background your borrower make sure they are good citizens

OH also you want to see title report if its a fresh funding.. or a copy of the title insurance if you buying existing and make sure the insurance is still in effect for any assignee as you would be buying the loan via an assignment

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Rental Property Investor · Jacksonville, Florida Area · Member since 2016 · 106 posts · 48 votes
7y
@Patrick Sloan I don't think you are asking too much from them. I would have to see everything before I went all in as well.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
careful on new origination over 12% in todays market anything higher is usually priced for risk.
Not sure what contract your looking for.. the Note spells out the terms.. deed of trust recorded secures your interest.
if you need a personal guarantee from borrower thats done in a separate document..
you can ask to review a sample note and trust deed and P G .. other than that there is just borrower info.. credit score net worth that type of thing.. you may also want to background your borrower make sure they are good citizens
OH also you want to see title report if its a fresh funding.. or a copy of the title insurance if you buying existing and make sure the insurance is still in effect for any assignee as you would be buying the loan via an assignment
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Patrick Sloan
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Portland, OR · Member since 2019 · 16 posts · 1 vote
7y
Thank you for your input @Jay Hinrichs having my name on the deed of trust would be acceptable security for me , after performing a title search, but that's not what is being offered her or at least not that I can tell? To me it looks like I would end up with a promissory not from the HML and have no true assignment of real property rights? Is this typical? Again may be it is the way things are done but I just do have enough experience to know or understand that?
Here is a link to one of the companies web site https://www.secureprivatefunding.com
I also have a word doc. I would like some input on if you would be willing to take a look at it for me?
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Ya I can tell by your response that your understanding of how these works needs a little tune up..
I think before you launch into this you may want to go sit and pay for 1 hour of time with a good real estate attorney who will walk you through what is proper and what you need or what to look for.
You don't put your name on the deed of trust unless your origination the loan right out of the gate.
you take a security interest after the fact via an assignment.. which is normal and fine.
If you want a referral to a lawyer there in Portlanida I have one that I can refer who does a lot of work for our company and is real estate specialist which includes loans.
I will look at the website you posted as well and see if I recognize them
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Ok I see that's Darren Eddy's company.. I suspect he uses assignments..
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Patrick Sloan
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Portland, OR · Member since 2019 · 16 posts · 1 vote
7y
I would be grateful for the referral.
Are you familiar with Darren's company?
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