newbe in non performing notes

14 Replies

Hello everyone,

I am new to the real estate investing world,and  I would like to invest in notes. Dose anyone know of a forum that has basics on what to do, or a book to recommend. Thank you.

Welcome to BP @David Harter  

From one newbie to another, here's what I've found so far.  This blog is a good start: http://www.biggerpockets.com/blogs/5359/blog_posts...

And a guy named W.J. Mencarow is a very good source, he has a lot of information and he's been doing it for a very long time, his website is http://www.PaperSourceOnline.com.

And if you haven't listened to the podcasts, they are full of information, #28 has Dave Van Horn on it and he's a note investor.

Brent,

Thank you do much for the helpful information, I will definitely take a look and the podcasts and W.J. Mencarow.

Hi, Check out -Noteworthy& Paper Source , they both have conventions.  I recently attended , " Legends of Real Estate ".   Jimmy Napier talked about Note Investing and he has seminars scheduled for 2015. I purchased his - Invest in Debt book and purchased his Money not Math DVD. at the seminar. I listened to his - Negotiating CD, it was excellent.

I suggest one Invest in Education- Books, Seminars,ect before spending money buying an Investment Property, Note,ect. Remember , Fail Small not Big. Please check out reviews on these seminars & products before purchasing them. 

Best Wishes, Mitch

Realtor with Keller-Williams

Glendale ,AZ

Mitch,

Thanks for the great content, I will defiantly look into them.

@Mitch Stanley  is his negotiation cd just deal with note investing. I would love to hear more from jimmy napier.

You might also consider attending the Note Expo in Dallas, November 7-8. 

You're in the right forum, just look for who is answering the most questions and with the best answers!

Definetely reach out to folks on these forums, you will connect with the right people. The Non performing market is beoming pricey as the market is saturated with buyers. You may also want to consider investing in 1st trust deeds with guaranteed double digit returns. Keep the income streaming in until the NPN pricing gets back to a more realistic price.

 I could not agree more with Tammy, be cautious of investing in funds that then invest in non performing notes. You do not have the safety of principle as when you have a first TD on an actual asset. It is true that your return will probably be higher in non performing second funds, but no one went broke protecting their principle with a trust deed and double digit returns.

I agree with the Paper Source as a good place for info.  There is a e-book on that site written by W.J. Mencarow about everything that can go wrong with a note that is very good.  And a e-book called "Legal Lessons" by Lorelei Stevens (who has been in the note business since 1971) that is very good.  I heard Henry Dvorken's course is good (I have not looked at it but it was recommended by two experienced note buyers) and I saw Dyches Boddiford has a note investing course (I have not looked at that yet either).   It seems like most of the note buying education out there focuses more on buying seller financed notes & getting into being a note broker, two areas I personally am not as interested in.  I do not want to broker notes, I just want to invest in them.  And much of the educational stuff out there is very dated.    I think more investors on BP are looking for info on buying notes from servicers, funds, institutions, etc... (versus trying to track down seller financed notes through direct mail, etc...)   Gordon Moss book "Performance Anxiety" (I have not read this yet either) seems like it is the only recent publication that deals more with the type of note investing people on BP are interested in.  I did read George Coats book and it is good, but very dated and rambles a bit.

I have not invested in existing notes yet, but I have funded trust deeds originated by hard money brokers the past few years.  It was very difficult (if not impossible) to find any decent education material or seminars to attend that taught hard money lending or trust deed investing as well.

@Tammy Obregon  

I agree with your comments except for the "guarantee" part... No gurantee's in any note purchase or investment your always counting on a third party that you don not control to make payments etc.. But yes there are just far to many good performing notes out there in my mind to chase down and buy into a problem loan which is what these NPN funds are.. a lot more to it than meets the eye.. and just like most RE fad's this is soup de jour so lots of uneducated or beginner money chasing these deals. That will lead to guys who know the game and business increasing price and making some pretty significant profits.

A really good book is "Smart Trust Deed Investment In California" by George Coats. While its for trust deeds, it can also be adopted for the most part for states with Mortgages & Contracts for Deed. It has a great appendix B with tons of examples of clauses you can also use in your documents.

Except that buying an old contract for deed is nothing like buying a note, except from the annuity stand point. Might search installment contracts on BP, hundreds of posts, they are a different animal.

Interesting seeing opinions on seller financed notes and the institutional which will be safer for beginners, the SF side is more profitable and the risks are easier to manage when you buy from the originating note holder.

When investors feel better about the market, many may return, especially if they get burned in notes. Popularity is growing!

I'll just let you all cuss and discuss, interesting observations of investment attitudes. :) 

  

The thing about seller financed notes is you have to put a lot of time, effort and money into finding them. Needle in the haystack.  Notes being  sold by institutions you just contact the company.   And hard money loans you can have brokers bring to you to fund. No big marketing  effort needed Also I personally will only deal with investor loans, no owner occupants for me.  If I could find seller financed non owner occ investor loans without a huge amount of time and effort, yeah I would love to go for those, and probably  would prefer them.  

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