Is anyone buying non-performing loans?

20 Replies

Looking to learn, was not thinking of dabbling. But interested in what made you say that.And is it a job or a business?

Will see if I can find your LinkedIn profile to understand your background. Would be interested in how/ why you got started in the business.

I stumbled (for lack of a better word) upon this area while looking for a way to get to REOs/ foreclosures. 

@Toral Patel

I would not worry about where the company is located as Note investing can be done from anywhere. If you are brand new then I recommend reading several books about note investing and watching YouTube videos and listening to podcasts.

Few key points to understand:

1. Note investing is not passive.

2. Figure out if you want to invest in 1sts or 2nds or both

3. Setup your team early

4. Best way to learn is to buy a low dollar performing loan or JV with a more experienced investor

@Linda D.

I’ve found that the majority of people who have been interested in notes go in to it with the idea of “mailbox” money. That the  average investor can simply jump on to one of the note exchanges out there, pick up a performing note and collect the payments. While some of that is true, there’s more to it than just reviewing the property and an exchange of cash for the ownership of the note. 

Then you get into nonperforming notes and my apologies, I meant a business vs a job. 

I got into notes for a couple of reasons. I held a small portfolio of rentals that had significant equity and I also began to see my cashflow be eaten up CAPEX and unit turns. In my opinion, every rental has point at which it needs to be sold. I don't believe in lifetime cashflow from a single rental (not that you only buy and hold one rental but that that one rental can have significant equity growth with cashflow to float you, then you sell and do it again or trade up). Although you can achieve cashflow, it takes a "cycling" approach, IMO.

So my pivot in to notes came about from wanting to achieve similar returns that I saw in rentals without the same headaches (notes aren’t perfect and have their own headaches as well).

My background is in Investment/Corporate finance along with RE investing since 2015. Yes, feel free to check out My LinkedIn profile. 

I did have a look at your profile. Thank you for sharing how you got into this.

My sense of this 1) steep learning curve 2) not easy 3) there is actual work involved :-) 3) it's like sales - you have to reach out to a lot of people and get a lot a lot of rejections 4) if you keep beating your head against the wall eventually you will get a break and things will come together 5) continuous education and outreach is important.

But really I have no idea as this notion came across my path literally 48 hours ago. 

I would like to educate myself a bit more and then - if you would be open to conversation (in which I have done enough homework to ask informed questions) I would be most appreciative.

@Linda D. Like Chris says, buy some low $ notes, and make your mistakes and get better. Nothing is easy, and you are coming in at peak note, hard to find with hundreds if not thousands of freshly minted note investors created by the 10+++ Fakebook note guru's willing to overpay... Good luck!

@Linda D.

Absolutely, I’d be happy to chat over the phone, pre and post learning hah. 

Like Chris mentioned earlier, there is a lot of really good content out there coming from “The good deeds podcast” and “the note closers show”. 

As for a good book, one I really enjoyed is called Win-Win Revolution by Bill Bymel. Now it’s not about taking back properties but about how to help borrowers stay in their home. Which is what we do. 

And as noted above, the objective is not to get your hands on the property when you buy a non performing note, it's about trying to help the person (or family) stay in their home or apartment. As a reward you get the monthly payments.

There is a ton of risk involved in note investing.

Had no idea there were thousands of newly minted investors! Still I’m assuming this is a big, fragmented market. 
I love the idea of helping people stay in their homes. 

Originally posted by @Linda D. :

Had no idea there were thousands of newly minted investors! Still I’m assuming this is a big, fragmented market. 
I love the idea of helping people stay in their homes. 

 If you are interested in acquiring REOs there is nothing wrong with buying notes on vacant properties. Its not my strategy but it can be a lower cost way to pick up REOs.

@Linda D. It's a very big market. But it takes capital to get started and the risks are pretty big so it scares a lot if people away and lots of people are not able to scale up easily.

There is a lot sales and negotiation.

IMO, the biggest challenge as I learn things is how different some laws in some states are for foreclosures. In some states it could take more than a year.

@Linda D.

I

Would disagree on it being a big market. It’s a very small market and you have people who will buy a note here and there but it’s a small community of those who are very active. There are a lot of people who are trying to learn notes but most do not stick around as it is more complex and a lot of legal issues. The moment most people get sued they get out - and you will get sued.

It’s not like your fix and flipping or Renting a property. You may be foreclosing on someone and lawyers are involved.

I am sorry to just jump in but I see that a couple of you have companies that are handling notes.  Do any of you handle non-performing notes?   I have been interested in those but it is a tough market to find the right people.  Any suggestions would be appreciated. 

Thanks

Steve  

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