Notes details

[NA NA]

Hi guys have a couple of qns about notes

Heard about notes but what are the ways to go about doing them?

Would investor allow to issue notes determine the terms and rate for the notes base on the house and investor would get the fund once buyer buys the notes?

Are there any online platform to do them more of a click buy

[Christopher Winkler]

Originally posted by @Darren Eady:

I prefer performing notes that pay you monthly without a servicing fee and with very little risk involved.  The lender sets the terms with the borrower and you take assignment of that loan by becoming the lender after the loan is created.  Instead of the lender being the bank and receiving the interest, you do.

Hi Darren, just to clarify, they are risky, there is a 50% chance they could stop paying at any time, though the risk is mitigated by the ability to get the property titled in your name. Its just a promise to pay, and if they loose their job, or a leg, or a spouse, or any other reason, it could force them to stop paying, and if they can't start repaying, ultimately you would need to get a Deed-In-Lieu, or foreclose.

Also, not to split hairs, when you buy the note, you are not the lender, you are just the note owner who receives all future payments; you never lent any money. Keeps you from having to comply with mortgage lending laws.

Also, you really should have a licensed servicer collecting payments. On Performers, FCI has a low priced fee to collect, send all required tax and other documents to homeowner, and you avoid any Dodd/Frank, TILA, FDCPA, etc. issues. I would like to see how many other investors here are self servicing vs letting a licensed servicer handle this.