Buying Notes - Do I need a MLO license?

5 Replies

I have an interest in purchasing and creating real estate notes as an investment company in the states listed below. 

I have heard about needing a MLO if I am creating notes but I am confused by the requirements.  It looks like it is state and even locally (city/County) specific. 

The business plan is to syndicate under Reg. D 506(b) to purchase real estate notes with investors.  We would be buying existing (performing and non-performing notes as well as creating notes using private financing.  In this scenario, is it necessary, to get a MLO license? and is there a multi-state licensing or reciprocity?  Are there any work arounds?  Is using a loan servicer sufficient?    Any advice is helpful thanks!

Looking to these States:

- Indiana, Colorado, Georgia, Kentucky, Louisiana, Arkansas, Alabama, West Virginia, Arizona, Florida

@Joseph Wise

Check out this link as each state is specific as you are probably aware. For example in OH, you will have to of had your MLO license for at least 3 years before you can own or originate. However in GA, you only need a lenders license (you will also need to have the entity that is holding GA notes to be registered with RA and surety bond like many other states)

As for your business plan, I’m not sure how much experience you have in notes, but jumping straight in to operating a fund for your first go around, you’re likely going to find that to be quit challenging. I have no idea as to your professional experience but sourcing notes along with asset management with little to no experience in the industry will prove difficult. (My apologies if my assumptions about your experience in notes is way off base)

I would recommend starting out with a few of your own notes in the states you would like to operate in and build from there. 

@Logan Hassinger  

I appreciate the the direction and the link I will check it out.  No apologies necessary, you assumption is correct,  I have limited experience.  I am looking to prepare myself over the next 18 months.  I was planning on JVing on as many notes as I can over that period and certainly get wet with some of my own.  I pose the question to see if it is worth it to get my MLO license in one of the areas (particularly Colorado as I live there).  I figure as I get the X n O's worked out legally and get a quality team in place I can engulf myself in the learning and experience.

Any suggestions on ways to connect in the industry? i.e. conferences, podcasts.   I will be attending an Eddie Speed 3 day event tomorrow via internet (thanks quarantine).  It seems like a small community and I certainly want to learn as much as possible, get the experienced necessary to be a good steward of other's money and be a real player in the space. 

Your input was valuable and I appreciate you taking the time.


Be advised Speed's education costs $15k for either performing or non-performing, $30k for both, at least it was that a few years ago. Also realize you are at peak note with hundreds & hundreds of new investors churned out over the last few years by the fakebook guru's, old sellers are gone, and they are all chasing too few overpriced notes. 

Also you can not advertise a 506(b) in any way, you have to have a pre-existing relationship with anyone you present it to. We tried a 506(c) and could not get out of the starting gate. Now to get my hindsight mirror from Invesco...