Non Performing 2nd Notes

[Tasha Mckoy]

Hello BP,

I am interested in purchasing non performing second notes. There are many companies out there that sell them, but in reading up on the subject, it was suggested that we not buy notes that have be sold several times in a short period of time, say a year or so. Many of these companies resale them quite often and that is a concern for me. Are they any trustworthy companies or entities that sale equity 2nd mortgage notes as a principal seller? Should make connections with hedge funds that buy them in bulk and break them down into smaller portions?

Thanks,

Tasha

[Andrew Syrios]

Originally posted by @Account Closed:

If you buy a 2nd non performing the first could foreclose and wipe you out. It is better to buy 1st non performing notes.

Joe Gore

When buying non-performing seconds, the key is to buy them behind performing firsts. You can usually get them for like 15 cents on the dollar, and if you buy right, you have you a good chance of getting them performing again, which can create a huge spread. It's riskier, but given they're so cheap, you can afford for a few loans to go belly up when you focus on this strategy.