Direct purchase from a lender as a new private investor

7 Replies

I've seen numerous posts here that it's slim to nil a lender will directly deal with a private investor with no history. Why "history" matters I don't have a clue since it seems like a straight purchase and sale, maybe their time or information is that precious.

Other posts shine rays of light and say it is possible to find lenders willing to show their inventory with enough outreach.

I'm targeting Ohio and maybe a couple other states depending on how many calls I might need to make. Do you guys think if I make 50 calls a day, I'll find a lender willing to sell direct to me? Or is this a complete moonshot? 

I have no experience. But I do have 50k plus another 5-6k/month to invest. I'm targeting NPN notes on houses around the 50-80k FMV range.

@Gary Dezoysa

Look at it another way - how many spam phone calls do you answer? How many spam emails?

This is a very small industry and most sellers don’t waste their time with newer investors.

One reason why is we call them tire kickers. They never buy anything and do not have the funds

They take a guru training program that says you can learn in a weekend how to find fund and flip deals and make $250k a year which is a joke.

After the training they go out in masses and start calling and emailing people and essentially blackball themselves but also make it much more difficult for new investors.

Your best to buy your first deal off a website like paperstac or from a servicer with a trade desk. That way you can learn the process.

Originally posted by @Gary Dezoysa :

I've seen numerous posts here that it's slim to nil a lender will directly deal with a private investor with no history. Why "history" matters I don't have a clue since it seems like a straight purchase and sale, maybe their time or information is that precious.

Other posts shine rays of light and say it is possible to find lenders willing to show their inventory with enough outreach.

I'm targeting Ohio and maybe a couple other states depending on how many calls I might need to make. Do you guys think if I make 50 calls a day, I'll find a lender willing to sell direct to me? Or is this a complete moonshot? 

I have no experience. But I do have 50k plus another 5-6k/month to invest. I'm targeting NPN notes on houses around the 50-80k FMV range.

Let me guess you just signed up for a monthly subscription to bank prospector. Most banks even if you do manage to get through to the correct source for selling loans within, will not sell one-offs for $50K.  They are mostly interested in selling a portfolio of non-accrual loans. This may include Church loans, auto loans, unsecured business loans Etc. As Chris mentions above, you are much better off buying through exchanges like Paperstac.

@Gary Dezoysa You're right about the time being that precious. With regular real estate, escrows with retail buyers fall out all the time and is expected. Loan traders don't like it when deals fall through at the very end for an unacceptable reason. It not only wastes their time but it also makes them look bad.

A couple of years ago, I would respond to inquiries about whether I had NPNs for sale. I wanted to help out newer investors. After responding to emails & messages, taking calls, and sending tapes, I had very little to show for all of that effort and sold none of my loans. Out of about 60 people, there was only 1 that even provided bids (no response to my counters) and only a couple that followed up from time to time.

In my book, you have to put in the time to develop the relationship.

Originally posted by @Gary Dezoysa :

I've seen numerous posts here that it's slim to nil a lender will directly deal with a private investor with no history. Why "history" matters I don't have a clue since it seems like a straight purchase and sale, maybe their time or information is that precious.

Other posts shine rays of light and say it is possible to find lenders willing to show their inventory with enough outreach.

I'm targeting Ohio and maybe a couple other states depending on how many calls I might need to make. Do you guys think if I make 50 calls a day, I'll find a lender willing to sell direct to me? Or is this a complete moonshot? 

I have no experience. But I do have 50k plus another 5-6k/month to invest. I'm targeting NPN notes on houses around the 50-80k FMV range.

 50 calls a day is not enough. I would be targeting 400-500/day. That is what I was hitting when I started cold calling here in Columbus, Ohio

@Remington Lyman thanks for mentioning that, I will adjust accordingly. Do you agree that banks and credit unions are not interested in new investors? If so, how did you put together a list of interested potential sellers (loan servicers have been mentioned here)?

Paperstack has 35 1st position NPNs priced fairly high. I will definitely focus on alternative sources if I can put together a plan of who to reach out to, who is a good fit for selling single npn loans.

Originally posted by @Gary Dezoysa :

@Remington Lyman thanks for mentioning that, I will adjust accordingly. Do you agree that banks and credit unions are not interested in new investors? If so, how did you put together a list of interested potential sellers (loan servicers have been mentioned here)?

Paperstack has 35 1st position NPNs priced fairly high. I will definitely focus on alternative sources if I can put together a plan of who to reach out to, who is a good fit for selling single npn loans.

It only takes one

Not sure. Google it. I was calling owners directly

@Gary Dezoysa , in my limited experience, most banks/lenders have deal flow requirements.  Essentially, the few investors I work with need to commit to buying 5+ notes per month from these banks to be worth the banks time (and 5 is a very small #).  @Chris Seveney 's idea of starting small, and building a track record before reaching these banks is a good idea.