Mortgage notes

13 Replies

Hi BP, 
I am looking for company recommendations to invest into mortgage notes. I am not an accredited investor. Ideally, I am looking for shorter commitments, from maybe 6 months to maximum 2 years for the loan. 
Does anyone know a good place to buy mortgage notes from? 
Any feedback on "Secured Investment Corp"?

Thanks, 

Anja

Try Eddie Speed, Texas

Hi @Joseph Ball  . I am not interested in buying any classes about note investing, but I found a reference to Colonial Funding Group on his web site and will check them out. 
Thanks, 
Anja

Hey @Anja Wehrmann  I just did an interview with one of the founding partners at RSI Asset Management. 

It's one of the organizations I recommend to new and experienced buyers. 

I assume with a the short term hold strategy you're looking at NPNs. Are you including the work out time into your time frames?

Colonial Funding is what I wanted you to find. (I have no affiliation with Eddie Speed, or any subsidiary.)

Hi @Chase Thompson . By NPN's, do you mean non performing notes? No, I am looking for new loans that only have a short loan term and the borrower will either try to sell the property by then or refinance.
Anja

Originally posted by @Anja Wehrmann :

Hi @Chase Thompson . By NPN's, do you mean non performing notes? No, I am looking for new loans that only have a short loan term and the borrower will either try to sell the property by then or refinance.
Anja

Buying a note at settlement, is "funding at the table" and isn't investing but lending. Mortgage brokerage requirements, servicing requirements and lender registrations can then apply. Buying a new note, such as an equity funded loan or a cash funded loan shortly after settlement through a broker is putting yourself in a wholesale mortgage position, regulations apply.  

Yes, you have it right as to NPN.

You might try to look at seller financed notes and simply fund a new loan to that note holder taking that note as collateral, this will put you more into a hard money lender position and registrations can be simplified at that level. You'll still have Dodd-Frank issues, but that angle may suit your expectations. The terms your considering are suited to rehab loans, Realtors carrying back commissions and small seller financed deals. You might also investigate "Transactional Funding". Good luck :)  

Thank you, @Bill Gulley  Yes, basically my goal to provide a short term loan to an investor, but not directly to him, but though a company that either provides the turnkey's or loans for rehab projects. For example secured investment corp or Safeguard capital partners. 
I am looking for feedback on these two companies or suggestions for others to compare. 
Do you know of any companies that provide such a service?

Best, 
Anja

@Anja Wehrmann  Try Norris Group.  I never did anything with them.  I just went to their website.

There are so many crowdfunding platforms also.

There are so many investors in Bay Area looking for fundings.

@Anja Wehrmann  

I've not conducted business with either, my notes are generated locally and not through brokers. I'd hesitate to endorse any broker really from professional concerns unless I was aware of their "backroom" operations. What I can tell you is those that pool funds need to be properly registered and licensed and doing so is often not investing as a note holder but in a fund, your due diligence is necessary (I know, that's what you're trying to do). I'd begin checking them out with the state finance department in the state they are organized in.

Also, beware of investing in a note with other investors, taking a fractionalized interest, there are many out there in the note business that know more about marketing a product than they do the product, you'll find overstated valuations of collateral to minimize the LTV implying a margin of safety and saying everyone is covered, that may not be the case as I've never seen a dollar split 3 ways evenly. LOL

The issue of your targeted market is you're funding at the table, not investing, so you can investigate that with a finance attorney. Good  luck :)

Originally posted by @Joseph Ball :

Try Eddie Speed, Texas

 Colonial Funding is a private equity fund, fyi. As far as I know, Eddie's group does not sell notes to "outside" buyers, only to their students. Cost of entry starts at $15K for their education courses. 

RSI is a good company but deals mainly in Florida NPLs which have a fairly long foreclosure timeline.

I have had good success with Granite Loans as they have notes in many different states and will sell singles to individual investors. They also have one of the best structured systems for previewing the collateral files. I'm not affiliated with Granite, just happy with my transactions with them.

Understand that the above are non performing loans (NPL) that you will have to rework to performance. If you don't know what that means, then you have a steep learning curve. You can also buy performing notes that a company like mine have worked out with the borrower and place back on the secondary market for sale. I would recommend you check out FCI Exchange to get a flavor for the pricing and locations of performing notes if this better suites your level of comfort/risk. 

http://www.fciexchange.com/

If you are just looking to loan money on RE projects, then probably one of the crowdfunding platforms like Fundrise or Realty Mogul may be a better choice.

Have fun!

Bob Malecki

Thanks, everyone, for your input!
Anja

@Anja Wehrmann  

there are many good HML in the Bay area just google them and go check them out. They can broker a deal for you... And depending on the broker they may be fractionalizing the notes that allows you to spread your funds to numerous notes.. although as Bill pointed out in a default scenario fractionlized notes can be a bear.

Hi Bob, do you know any companies that sell NPNs in MN?

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