How do I go about selling our subordinate notes for SFH?

Question

Hi guys, in the strategy I am currently pursuing I need to sell subordinate notes for residential investments, about 40% of the ARV of short term SFH rental properties.

How would you suggest I go about the process?

Are there any standard marketing tactics / processes / software / to simplify this procedure?

Thank you in advance.

Matt Devincenzo · Answer

Are you going to be the note owner that is selling these? Or are you trying to Broker them?

Paperstac is a great resource for note sales that several members here are active on. I'm sure if you can provide the documentation discussed above, and they are well underwritten and appropriate LTV etc, you can get them sold.

Alex Breshears · Answer

Hi Olga! You are in my market! Small world! When you say subordinate notes, are you talking about 2nd liens on the properties?  You will also want to disclose who the first lien is held by, if the property if non-owner occupied, and also any sort of underwriting documents you may have collected as part of the process to qualify the loan.  The more of that you can provide, the better the price you will receive for the note.  Now 2nd liens are a smaller pool of buyers, and you are unlikely to get 100% of the unpaid principal balance unless you really have some very very low CLTV notes on nonowner occupied property with great payment history and lots of due diligence documentation.  There are groups on FB where you could learn more about the buying and selling of notes, and also there is a BiggerPockets book about note investing you could also check out.  I do know someone who brokers notes and may be able to help you find a buyer as well, so feel free to send me a message. Good luck!