Perfoming Notes investments?

Question

Hi, I'm looking to invest in Performing Notes using my SDIRA.  Where do I find Notes to invest in and how does it work??

Thanks!

Robin

Jeff S. · Answer

We’re on the email list of a handful of local hard money lenders and receive potential deals to loan against every day, @Robin Cornacchio.  This is how some lenders find their money.  We happen to find our own borrowers, but we could certainly call these brokers if they offered anything that interested us.  They would also know if any of their investors wanted to sell loans they made.

In either case, with your authorization, the broker would work with you, the property owner/borrower or note seller, and also with your SDIRA custodian to arrange funding and transfer of the appropriate paperwork.

Atlanta is a big city and there should be plenty of deals for you to choose from. That is, always do this locally.  First position purchase money only.  You’ll always want to check out the borrower and the property.  Real estate clubs are the best way to find brokers who work like this.  Alternately, you can go to the Scotsman Guide and the American Association of Private Lender websites to find resources.

I don’t know if it’s legal in GA, but some states allow fractionalized loans.  Here, several investors (including SDIRA’s) can lend on one first position loan at the same time by sharing their pro-rata (fractional) interest.  This is worth finding out about as well.

Last, depending upon the amount of money you have and your accreditation status, your SDIRA can invest in a syndicated mortgage pool.  In this case, you are not investing in any one loan but have an interest in a pool of notes.  Many of the larger hard money lenders run mortgage pools and accept SDIRA money.

Good luck to you, Robin.

Robin C. · Answer

Great info, thank you!!