Notes Market Feeling Slow?

Question

Hey everyone,

Lately I’ve been scanning for mortgage notes to buy, and it feels like there’s almost nothing out there—almost like sellers are holding tight or just not posting. Curious if anyone else is seeing the same thing.

Is the market just slow right now, or are sellers just being more selective about who they reach out to? Would love to hear how others are finding deals in a quiet market.

Matthew Cates · Answer

@Chris Seveney I can see the concern for moving away from CFD's and only traditional mortgages.  There's a market for them for sure...but it does come with it's added risks.Thank you for the response!

Chris Seveney · Answer

@Matthew Cates yes it does have extra risks but also in some situations there are some great rewards. I wanted to mention I am not opposed to them, I think they can be great for people, they just don't fit our model anymore

Chris Seveney · Answer

We did receive over the weekend $20 million pool of non-performers that were owner occupied. We bid 5 million of it, but I agree haven’t seen too many owner occupied NPL's

Chris Seveney · Answer

We are seeing a ton of activity on the defaulted DSCR and fix and flip loans. Most are loan balances above $300k. We recently saw around $500M combined between several of the larger aggregators putting out these types of loans. Owner occupied stuff is slower right now. I know HUD HECM is coming out with a $700M+ pool as well.

James Mc Ree · Answer

Can you elaborate on the special risks and great rewards of CFDs?

Chris Seveney · Answer

there are too many to name but there is plenty od podcast episodes on this on those that focus on note investing

Matthew Cates · Answer

@Chris Seveney & @Charles Kennedy do y'all do anything with buy performing Contract for Deeds?

Chris Seveney · Answer

We used to buy a lot of CFD's pre-covid, I stopped buying them several years ago due to ongoing legal issues with states along with property conditions and borrower credit continued to decline so now we stick with traditional mortgages. There is definitely a market though for CFD's especially for newer investors or those with smaller dollar investments as the cost to enter is much lower.

Tim Joslen · Answer

Yep. I think harder to find one now.

Charles Kennedy · Answer

Appreciate the insight, Chris. That lines up with what I’ve been seeing too — anything owner-occupied feels pretty quiet, while the larger DSCR and flip paper seems to be where the movement is. Interesting about the HECM pool as well, that’s a sizable release. Sounds like deal flow hasn’t disappeared, it’s just shifted upmarket and into distress.

Notes Market Feeling Slow?

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