Notes Investments: Crtieria for Selecting Location

[Michael Wang]

Hi everyone, I'm a land investor with experience in flipping residential land, including infill lots and rural vacant land, with market values ranging from $40,000 to $200,000 in NC and TN. All of my transactions have been cash sales. Lately, I've been thinking about to creating a note portfolio to build a six-figure "passive income".

Are there any specific criteria for selecting states for note investing?

I've been thinking about the difference between judicial and non-judicial foreclosure states. Non-judicial foreclosure states have a faster foreclosure process, which means I can recover my investment more quickly if a borrower defaults on payments. But some states have both judicial and Non-judicial foreclosures, and I guess I will need to narrow down to specific counties. 

I'd like to create my notes as well as buying some performing notes done the road using investors' money.

What's your thoughts on picking up a specific state or county for notes investment?

Thanks

Michael

[Don Konipol]

Quote from @Michael Wang:

Hi everyone, I'm a land investor with experience in flipping residential land, including infill lots and rural vacant land, with market values ranging from $40,000 to $200,000 in NC and TN. All of my transactions have been cash sales. Lately, I've been thinking about to creating a note portfolio to build a six-figure "passive income".

Are there any specific criteria for selecting states for note investing?

I've been thinking about the difference between judicial and non-judicial foreclosure states. Non-judicial foreclosure states have a faster foreclosure process, which means I can recover my investment more quickly if a borrower defaults on payments. But some states have both judicial and Non-judicial foreclosures, and I guess I will need to narrow down to specific counties. 

I'd like to create my notes as well as buying some performing notes done the road using investors' money.

What's your thoughts on picking up a specific state or county for notes investment?

Thanks

Michael

My experience is that’s it’s less risky and more profitable to restrict investment to an area you’re expert in.  At some point, if scaling, you run out of “deal flow” that meets your geographical, risk and return related criteria.  At this point you need to decide if you will (1) limit your investment amount or (2) lower or change your criteria/standards or (3) expand geographically. 

in 2014 after 13 years of Texas “only” note investments we expanded to other non judicial foreclosure states.  In 2019 we went “nationwide”.