Successes with FCI?

[Jonathan Napper]

I have read numerous threads on here about Notes with FCI, Granite & Kondaur,  I also read people saying "Any note bought online is junk" , "The seller is just looking for the next bigger idiot."

Any Note investors on here - who have conducted business with either of these companies, actually verify such statements? Can anyone share successful Note purchases from these providers? I am not necessarily looking for detailed breakdown, but  can anyone vouch that there are good Note investments to be had from these providers?

Thanks

Jonathan

[Bob E.]

I have made the mistake of purchasing through FCI and regret it.

Have purchased from both Granite and Watermark but am still in the resolution process so not sure how these will work out.

[Bob Malecki]

My last 3 npn purchases were through FCI Exchange and they worked out well. The FCI staff were very professional and diligent in the management process, the notes were purchased at a good price and all the transactional processes were completed without a hitch. 

Now, realize that there are a LOT of overpriced notes and probably many that have more severe problems than the seller wants to deal with (hence why they have it posted for sale). The good thing about FCI is that I have the ability to review the collateral files and have the seller answer my questions during the due diligence period using the online chat tools when the indicative offer is accepted and we move to the subsequent steps in the FCI portal online. There were other notes that I ended up passing since the collateral files exposed things that I did not want, or the seller was unwilling to lower their price after we found back taxes or other liens that affected the value. 

I'm also on Granite and Watermark's lists and most of the assets they offer are pretty much bottom of the barrel notes that they themselves don't want, so they sell them off to the smaller investors. Some diamonds in the rough can be found, but you have to wade through a lot of "hazardous waste" to find those gems. 

Basically if you are just looking for one-off note purchases and have the time to do research, you can find some decent values on the FCI Exchange site. To find a higher grade of assets you will need to be able to fund a larger pool of notes than take what you want and sell off the rest. This is what Granite and other aggregators do. 

[Andrew Syrios]

Originally posted by @Jonathan Napper:

I have read numerous threads on here about Notes with FCI, Granite & Kondaur,  I also read people saying "Any note bought online is junk" , "The seller is just looking for the next bigger idiot."

Any Note investors on here - who have conducted business with either of these companies, actually verify such statements? Can anyone share successful Note purchases from these providers? I am not necessarily looking for detailed breakdown, but  can anyone vouch that there are good Note investments to be had from these providers?

Thanks

Jonathan

My colleague Sandor Lau has bought a few of FCI, I think, and it looks like he will do well on them (it always takes a while with notes). I think that most of the notes they have are junk, but there are some diamonds in the rough. At least, that's what I gather.

[NA NA]

Would note buyer buy notes on 30yr amortize term with 13percent terms

Would there be a demand?

[Robert Howell]

@Jonathan Napper.  I have had success and not so much success with FCI. It comes down to your own due diligence. It doesn't matter where the note comes from. You are solely responsible for what you buy.

I plan on using FCI to sell some of my notes. But remember, FCI only facilitates the sale, there are a lot of sharks in this business. Both good and bad have access to their site.

I have had success with Granite but Granite is no longer in the note selling business.

[Robert Howell]

Edit: They have moved their entire portfolio to an institutional buyer. So maybe they're just taking a break. :)

[Bob Malecki]

Originally posted by @Account Closed:

I already bought a few loans from Watermark Exchange and the process was pretty smooth. I never bought from fci because they never call back! trying to get an answer from them is impossible... so that's my experience with them. Take a look on Watermark's website, it's really easy to use... and they have a simple system. They dont pressure you to buy more loans like Kondaur and Granite used to do. Watermark just released a new offering few days ago. I used to buy from Kondaur a long time ago but I don't think they are around anymore.

To clarify,  FCI is a loan servicer and has nothing to do with selling notes. FCI Exchange is just a listing service for note sellers. They are not direct sellers. You need to use their online system to make offers and online chat with sellers to get the info you need. FCI will not provide you any info on a seller's asset since they do not represent the seller. Hope this makes sense

[Scott Carson]

Actually, if you are looking for better deals, you'll probably need to start reaching out to regional banks and portfolio lenders...I consider FCI to be the Loopnet of the note industry...if its listed on there, its probably NOT a deal.  I'm not saying there are nuggets on their occasionally, but I'd rather buy direct!

[Bob Malecki]

I agree with @Scott Carson's perspective in FCI Exchange-- their sellers are posting a lot of notes that have been reworked or are just have too much hair on them, so you have to do a lot of hunt-and-pecking to find a good deal, but I've purchased 4 notes on the exchange with great success and good margins. 

Also Kondaur is still in operation, I just got a small tape from them from my request for specific states. I don't spend any time dealing with financial institutions-- I'd rather leverage my relationships with asset managers and credible brokers that I've developed over the years. 

[Scott Carson]

Kondaur wants too much...

We do a ton of drip marketing to asset managers...

Monthly emails leads to steady deals direct from banks!

[Bob Malecki]

And that is my point, that "ton of drip marketing" requires more overhead in expenses, staff, and consumed time. For most small/single note investors keeping costs down and time optimized is a critical component, so having relationships with those who will proactively forward assets for review is beneficial. Having an internal system to weed through the crap and take action on the good assets adds to the efficiency factor! 

[Bob M.]

I've purchased only performing notes from FCI exchange and made a steady return on all of them. You really do have wade through hundreds and check the site daily for new offerings before you find a good one. Even then many times you find problems in the due diligence after you have made your offer. You can't really blame FCI for the quality of the notes because like Bob said, they are just a platform.  Like blaming Scottrade that you bought some bad stocks. I like the platform they have setup, easy to see realtime payment history and collector notes if they are the servicer on the note being offered, and good communication tools between the buyer and seller through the process.  Helped me when I was a new note investor understand the step by steps of the transaction.  Once purchased, they have been good on the servicing side as well.  

[Scott Carson]

@Bobmalecki....I'm sorry, you are wrong here.

Drip marketing does not take a ton of time, staff and resources...

How difficult is it to send an email out once a month or every couple of weeks through Mailchimp, Constant Contacts or some other CRM tool?  Not long at all.  Heck, you could pre-write up your monthly emails on a weekend and then pre-schedule them to go out every month from now...

How much does it take at night or money to message or connect with Secondary Marketing or Asset Managers on Linked In?  It takes some time to do it while your watching CSI Miami or watching the game, but what else are you going to do at night.  Heck you could copy paste the same message around 300 times to different asset managers doing a FREE search...

I'm not talking about wasting money on writing up yellow letters, or sending out post cards to asset managers...I'm talking about actually marketing like its 2016 instead of 1996.  

Literally in around 5 minutes on Laneguide, you can pull 700 asset managers.  

What it does take is to actually sit down and do it...and no you don't need a big staff or extra overhead. You might hire a VA from aboard to help clean up your lists, but honestly, its a pretty easy process to do this and "set it and forget it" to have an email go out once a month branding you directly to asset managers...

They might not have something every month, but when they do, who are they going to contact?  The guy marketing to them every month (Me) or the guy NOT reaching out to them...

Screw wasting time on FCI scraps...let's get some deals with some meat on the bone!

[Jay Hinrichs]

@Scott Carson  whats your take on Econo homes  .. I just saw a tape from them?

[Bob Malecki]

Originally posted by @Account Closed:

I agree with Scott and Bob in regards to buying from FCI that if they are for sale they've been worked out. Also there is a lot of hair on them. I've been trying to buy from them for a long time and not only they are expensive but it takes a long time for them to get back to you and many times never! Fci's process is just horrendous. I purchased from Watermark Exchange(1st liens only) and i really liked their feedback process and their honesty. It was hard for me in the beginning because they don't have pricing listed but after speaking with them I understood the process and its simple. I was warned about the time it takes to receive collateral from Watermark but I received it in about 2 weeks and no problems.I bought 12 npn's from them. One negative about Watermark is that they are not really set up for 2nds and if you low ball them on a bid they wont get back to you - otherwise they've been great. If you are interestd in 2nds the best place to buy is PPR and sometimes Trinity.

 Wow, this is the third Watermark review in the past week posted on BP that looks like it came from a template

https://www.biggerpockets.com/forums/48/topics/276...

https://www.biggerpockets.com/forums/311/topics/21...

https://www.biggerpockets.com/forums/70/topics/238...

https://www.biggerpockets.com/forums/70/topics/258...

[Scott Carson]

@Jay Hinrichs  I think Econohomes wants too much for their deals...

[Jay Hinrichs]

@Scott Carson  the lady there told me that they made loans on these homes and they are now bad and they want to dump them.. I was not aware that econo was also a lender on owner occ deals..

but then I am not very familiar with this side of the industry.. I thought econo bought assets by the hundreds then peeled them off to flippers..

[Scott Carson]

That's what they usually do...I didn't know that they were owner financing them...Give me a call or shoot me an email offline and we can talk.

[Tucker Long]

Does anyone have any experience note flipping with these websites?

[Shawn Lee]

Yes econo writes loans on them. We bought a rental from them years ago in 12-13. They were asking 13% for NOO. All their assets were really rough so they were marketed towards landlords that couldn't get financing.