What CRM system should I use for notes? SDIRA questiona also

9 Replies

Hello fellow BP followers,

I recently enrolled in a note boot camp (it was free if I purchased a pool of notes) and it was suggested that we set up an account with notedashboard.  The first 10 notes are free, (at least for a month) then there is a monthly charge of around $30 for up to 10 notes.

I was wondering if everyone uses some sort of CRM system to manage their notes, and If so, what is everyone use?

Additionally, I purchased a pool of notes within my SDIRA and one note outside my IRA.I purchased one outside of my SDIRA so I can learn to work a note myself, first hand. Can I pay for the service outside of my SDIRA so I can use that service for both my SDIRA and my other note or do I essentially have to have and pay for two CRMs in order to be compliant with SDIRA rules? What does everyone else do when they have notes both inside and outside of their IRA?

Personally, just like bank accounts and other investments, I would not mix my SDIRA and non-SDIRA assets. * I am not a tax professional

Wait, what??!?

You were "given" 10 free loans and have to pay a monthly membership of $30 to continue to get 10 loans a month for free?  

What sort of wacky, cockamamie, program is this?  

Loans being handed to you for free are by definition "worthless".  

The boot camp is doing you no good service forcing you to purchase something you do not understand the liability and regulation around prior to ownership.  Not to mention calling into question their intentions and knowledge about the same.  Frankly, sounds like they are just selling you crap.  You should stop now and ask for your money back and walk away.  Scratch that, run away.

While the general description is these assets are "loans" it is not clear what type of loans.  I am guessing by the price they are mostly unsecured junior liens.  

Most states will require you to obtain a specific debt collector's license to pursue those collections.  So I would take the CRM idea and kick it to the curb.  Debt collection is not DIY by any stretch of the imagination.  Do it wrong will get you in a lot of trouble and can result in very large fines.  

Even if these loans are secured, that too presents a large administrative burden to properly service those accounts.  One that, NO ONE is ready for just starting out.   NO ONE.

To suggest otherwise is either an illustration of self serving motivations or incompetence. 

I am not sure what "service" you're asking about being paid inside or out of your IRA as I don't see one. This club is far from a service if this is the direction they point you in. They are serving their own self interests (selling you crap) not your investment interests.

My jaw is literally on the floor as to the absurdity of this "program".  Can we ask who puts on this bootcamp with free loans?  

What did they actually give/sell you?  (as you understand it)

@Bill Gulley - I am guessing it is in your backyard.  

Hi Sandy, I know what program you enrolled in and I have to side with Dion with his general opinion. You don't need the note dash board app to be compliant with any SDIRA regs. You don't need it at all until you get to a size that makes sense. Platforms like Note Dash Board and Notewerx are great when you have a team that you need to deploy over a large amount of assets. 

I've been using Googledocs, Basecamp and email to manage my teams on notes in various states both in and outside of my SDIRA. Its not as elegant as one of those platforms, but less costly and just as efficient. I have my loans boarded with FCI who has licenses in all states that I own notes and they handle the collections/taxes/statements/etc. 

Also, the course that is included with this program is being rebranded from Keyhole Academy, fyi. I don't know the integrity of the notes that the sponsor is providing you, but for the list price of $25K, IMHO you can do better than buying a bunch of 2nd position notes in a boot camp. 

I had the "opportunity" to enroll in a note mentorship program with a well known Texas company for $15K and instead I went out and bought a NPL for that money, and in 8 months got a settlement from the borrower for $25K. After expenses my ROI was 68%, and I learned a lot. I find that experience is the best teacher, with a caveat that proper due diligence and research is critical to that point.

Having the advice of seasoned note investors here on BP and making relationships with other investors at conferences and online via Linkedin and other forums provides a large amount of good sensible advice at a very low cost. This is my 2 cents...


@Dion DePaoli:

Sorry, I must have not been very clear with the way I was wording the question. I am taking part in a bootcamp with National Note Group where if you buy a pool of notes, or any combination of notes from their vault that add up to $25,000 or more, you are able to take part in a bootcamp. Essentially, buy the notes and the class is free. The class starts Sept 14. For me, since I intended to buy notes anyway, this was a way to both buy notes and get some education also. It also forces me into ACTION rather than just sitting on the sidelines and reading about the note world. I had met Fuquan Bilal at an REI expo about a year ago, heard him speak about NPN. I was impressed with him then and have spoken to him on the phone several times about this class. He is very approachable and loves to answer questions.

After boarding our notes with a servicer, Fuquan suggested that we sign up for Notedashboard as a way to organize and manage our notes.  Being new to notes, I wasn't sure if a note management program was necessary and if it is necessary, is this the best note management program?  (I guess I referred to it a CRM which added to the confusion)  Notedashboard has a trial month that is free for your 1st 1-10 notes that you wish to manage but thereafter there is a monthly fee based on the number of notes you are managing.  With Podio, and as Bob Malecki mentioned, Googledocs and Basecamp,  is a note management program necessary? 

Part two of my question had to do with having notes both inside and outside of my SDIRA:  How are these monthly services paid for?  IF I were to use some sort of monthly service, do I essentially have to pay twice in order to comply with SDIRA rules?  In other words, do I have to once for my notes that are held in my SDIRA and again for my notes held outside of the SDIRA?  There must be others out there that similar situation.  What do you guys do?

Hi Sandy,

For a few notes I think that a note management platform like Notedashboard is overkill and adds expense to your bottom line when they start charging you a monthly subscription fee. Adding this to your servicing fees on each note your profit margins can shrink significantly. 

Regarding holding assets both inside and outside of your SDIRA, you would just pay for servicing for the non-SDIRA notes from your regular business account and for the notes in your SDIRA, you would either have your sdira custodian pay the monthly fees via submitting a Direction of Investment to them. 

A more ideal way is to create a "checkbook controlled" LLC that then you pay from that SDIRA-owned LLC's checking account. I have my sdira set up that way, as a company owned by my SDIRA then I just use that company's business debit card to pay for servicing and 3rd party services like BPOs, and O&E reports which can all be ordered online.

Hope this helps!


@Dion DePaoli

Just had a great idea, we can get train loads of worn out tires for almost nothing.

Then we open a business giving seminars and boot camps on how to build houses with tires and concrete. The business hypes the houses as state of the art, energy efficient dwellings that can be leased, oh heck, for more than market rents because there won't be high utility bills. 

Now, we charge $25,000 for the boot camp, it includes everything they need to know.

But, if they agree to buy our tires for $25,000 taking them off our hands, we can make the boot camp absolutely free! 

A really slick bait and switch I'd say. 

We give no warranty as to fitness of the tires, they are salvage and, since the boot camp is free, we don't have any real liability there either!

We don't even have to touch those tires, just drop ship them as we sell them.

Let me know if you want in on the once in a life time opportunity, time is wasting!

As to the servicing issues above, a servicer can keep the accounting separate in house, servicing isn't an account based matter as much as on a per note holder basis, just speak to the servicer, I'm sure they are adapt to loans held in tax deferred accounts. :)      

To answer your question without all the extra text trying to make you feel bad, yes you can use a CRM like notedashboard or simply dropbox with excel spreadsheets.

No, NoteDashboard isn't "the best" as it is an entry level software and designed for smaller investors. It is more than adequate for your current needs. The advantage to using this type of software is that it looks more professional than excel if you try to raise money from investors.

It's not necessary, just a tool you can use. Many tools have fees.

I've met both Fuquan and Alberto (who is behind the CRM) and they both seem like stand up people. Nng tends to advertise uunderwater FL notes which are tougher to collect, but that's the inventory they focus on.

Good luck and feel free to connect as I got started in note investing with seconds and I can probably answer a lot of your questions.

@Sandy Uhlmann

Thanks for the explanation.  Some of us more experienced folks are not fans of these guru seminars and boot camps - especially when it comes them peddling defaulted second liens.  Most of these programs (and this sounds like one of them) are in the business of finding newbie investors to buy loans which the guru doesn't own and only takes a position on after they have a downstream buyer.  Generally with a large margin.  

These types of loans trade in the secondary for 2.5% to 5% of UPB if the loan is still secured and if not they will trade for 1% or less, commonly around 0.50% to 0.20%.  I am guessing you didn't get $1.0 million in UPB in the pool you purchased for $25k.  Somewhere around 15 to 25 loans depending loan level balances.  The high side of that market pricing would be for loans with good standing first liens and equity.   These are the types of assets that the more you pay above market the higher chance you have of getting burned with low to no recovery and collection.  

If you place the loans with a proper servicer, which you should do with no exception, you will incur around $840 annually for each loan in servicing costs.  This does not include any expenses or advances you may have to make to try and recover, collect or enforce the loan.  As you can calculate in  just a little over a year you will have paid as much to service those loans as you did to purchase them depending on the size of the pool you purchased. Though I suppose with an inflated price and thus lesser accounts in the pool they saved you some money on servicing costs while charging you more for the loans.  
If you place your loan with a proper servicer you do not need servicing software.  Newbies shouldn't be looking to try and setup servicing software solutions as in darn near every situation the newbie is not up to speed with the large amount of compliance that goes with actually servicing a loan.  It is cringe worthy when a software system offers template letters and documents to newbies for account actions and borrower correspondence.  It is wiser to rely on your servicer to provide those documents which should be prepared by an attorney specific to that loan and subject property state.  Unless the software provider is going to take on the liability for improper documents and compliance citations.  The little software guys won't do such a thing in most cases.  

Most of the time you can simply use the reports from your servicer and a simple database setup via Excel or Access and save your money.  Each month you should get or be able to download a report for the previous month in regards to loan activity and loss mitigation efforts.  The loss mitigation directives you give to your servicer on each account should be stored in the servicing notes for each account.  The main database interaction you will have with a properly serviced loan is more for your account notations than much of anything else.  Those programs (Excel or Access) can accommodate you managing upward of a couple hundred loans without too much complication.  The key is get familiar with the management tools your servicer offers first, then look to supplement your administrative needs.  As such, I would not look to any industry specific software solutions right now.  It is impractical to believe you can judge the features and costs along with the impact on your investments with limited experience around the board.  

As far as the accounting side goes, as Bob M mentions, the holder of the loan is the entity which pays for servicing costs and makes advances.  

I will just make this point again, these programs are not all about the investors, they are about serving the desires of the promoter.  

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here