Mortgage Note Price Inflation

5 Replies

Any note investors notice lately the prices to purchase 1st lien distressed loans have been increasing? The days of picking up a note for 30 cents to the dollar but 60% for non performing is getting a little out of hand. 

Our note broker so far has not increased the prices for us so we still get good deals but I hope it doesn't get out of hand for everyone. 

I've observed a lot of variation in pricing, sometimes even from the same seller. I think you need to develop a pricing model and stick to it, and then always be widening your network of sellers. 

Supply & demand, too many people coming into the note space paying too much, which will cause them to make low gains and hopefully motivate them to find the next shiny object. Its the same for junior liens...

Originally posted by @Jason Dellaposta :
@Dan Deppen I agree just becoming harder and harder to stick to those original numbers

 Don't exceed your numbers. Just like with flips, the profit is made when you buy and if you get caught in a bidding war, you will suffer when you try to exit.