US citizen living in Thailand here. Is performing note investing viable for me? If yes, what additional challenges should I be prepared for?
Yes it is viable.
Most note investors outsource the work including having a licensed 3rd party servicer. They are the key - since you are overseas you may want to find one who can handle a lot of the tasks like collateral storage as well
Other team members are an attorney, preservation company, reo asset company in case it ever went delinquent.
I run my business from my home and have ran it from overseas when on vacations
Only obstacle really is the time zones
Thank you @Chris Seveney ! I'm also looking into non-performing notes. Same deal or totally different beast?
I know it requires tracking down debtholders, reperforming the note, sometimes foreclosing, etc. Seems like something someone with a phone and an attorney could still do remotely though I could be wrong.
Yes, It is certainly doable.
I am an American living abroad and I invest in notes. Mostly performing. Most of the work is basically e-mails and web searching, sometimes you need a zoom or a call with a lawyer, servicer, realtor etc. and that can be done even with the time differences.
I know people who handle real estate rentals and flipping houses from abroad and that is way more time consuming than notes..
@Gary Dezoysa Non performing Notes (NPN's) are very highly priced right now. Be very careful in this market segment.
A few thoughts if you are new. Vacant properties are tough. They usually require a LOT of work, that is why they are vacant, they are usually not habitable. We started our portfolio buying NPN's back in 2015 - 2016, then switched to buying rentals due to the NPN cost being to high. I have not seen any improvement in that trend.
Yes you can do this from afar. We never saw any of the properties we bought the notes on. Use a title company to pull the title and look for any liens. Check back taxes on the county website, Use a BPO agent to get some current pictures of the property. Then call the agent and discuss the neighborhood. Check rentometer.com for neighborhood rents if you take it back you may end up renting it or selling to a landlord so this helps drive value for the property.
If you get a property back you have a few options Sell it at the FC auction, Take it back an wholesale it, Take it back and rehab it to flip, rent or BRRR.
@Gary Dezoysa I invest in performing and non performing notes based out of NYC. My first note purchased was back in 2015 in Arizona. With little experience in the note game and never even been to Arizona it was extremely easy to manage. Although it went smoothly I was prepared for worst case scenario with local lawyers lined up incase. Best of luck! Feel free to reach out.
If you have the right system in place to manage the notes, where you are based is becoming less and less relevant
@Gary Dezoysa Yes, this is a viable business for note investing abroad and I have done it myself prior to 2017. I had a business partner based in the States, which made things much easier because he could handle some things a lot easier than I could.
Some of the obstacles:
Time zones (as Chris mentioned). Most vendors work and are available Mon through Fri from 9 am to 5 pm. You have to adjust to their hours if you want to get things done.
Phone calls. E-mail is great but sometimes a phone call is the best way to communicate. Zoom can be even better. Where I was overseas, internet quality was mostly good but did go down at times. You're stuck in the water at those times.
Notary. Maybe the biggest inconvenience is getting things notarized. US consulates and embassies offer notarial services to US citizens abroad but this can be a hassle depending on your situation. So much nicer that all I have to do nowadays is go down to the UPS store and get my affidavit notarized. In the old days, I'd have to deal with checkpoints and hope that the one person who notarized documents was working that day since they never posted a set schedule.
Performing notes are a lot easier. NPNs are a full time job and I wouldn't want to do it without a trusted team based in the States.
So glad you asked this question, because for all of 2021 I was living in Australia. (just returned in Nov 2021). The entire year over in Australia I was note investing and growing my portfolio. PN's will be some of the most passive income you ever make. The biggest challenges would essentially *at most* making some phone calls in the US Time zones. (it's an 17-19 hr difference in Australia) There were some late nights and early mornings here and there, but thats just a part of my Due Diligence process.
Best advantage of note investing is there aren't many "life threatening" deadlines you need to jump on, so for the most part you can do your end of the deal when you're awake in your timezone. (Let me know if that makes sense).
Onee of the challenges you'll face if you don't live in the US is the physical collateral. You'll want to store that in a safe place, I'm sure it could be sent overseas. There are also services that will keep your collateral files secure for a fee, so that may also be a good option.
I have a google voice number. As long as you have a cell phone # to attach it to, you can create a US number, that'll help with making calls easier. Might be a small fee if your # originates outside of the US.
@Harrison Silverstein was in Australia for 11 months and grew his note business 50% and passive income by 40%. It's totally doable with the right community. There are a lot of moving parts that your resources are imperative to your success. I would love to see him write something on that experience and showcase his acquisitions.
For those that are active in performing notes, What yields are you getting these days? How are you sourcing your notes? We started in the NPN space back in 2015 and then shifted to owning rentals as the pricing on NPNs got to high for us.