Is it possible to find a note or fund that has the following?

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• 1-Allows Sophisticated but non Accredited investor
• 2-1st Liens only
• 3-Performing Seasoned Notes
• 4-3yr  term or less
• 5-Monthly income stream
• 6-$50,000 or less investment
• 7-50% or less ITV
• 8-Servicing in place
• 9-Passive
• 10-10% plus return 
• 11-Buy back Non-Performing notes after  90da at paid price less payments received.
• 12-Home values around  $100,000
• 13-SDIRA qualified

Account Closed · Answer

i would add #13- The fund pays your 3 year 10% interest in advance

Christina F. · Answer

Rick Meloni, there is some good note education out there. The best I've found thus far is Scott Carson for note education.  He focuses on 1st lien non-performing notes, so check it out. Excellent stuff! He has a podcast every Monday night, & tonight he's going to be reviewing some assets, performing & non-performing, that he's gotten from a Hedge Fund, so you'll get a little idea of how it works.  Send me an email & I'll send you a link, or search him online. Of course, if you'd like to joint venture together on one, contact me.

Wayne Brooks · Answer

14. And a pony.

Short answer, no.

Bob Malecki · Answer

Hi @Ian M. I believe Rick has been in contact with my partner Kevin about our fund. We check most of the boxes on his list.

@Rick Meloni, I don't understand #11, in what circumstance would a passive fund "buy back" a NPL?

Jay Hinrichs · Answer

rick this is not possible in any way shape or form unless you go find your own notes..

Account Closed · Answer

there were so many conditions I figured 1 more could not hurt @John Anderson

Bob E. · Answer

• @Rick Meloni  I am not sure if you are going to find a fund with the above criteria but you could check off a lot of the boxes by buying a serials of entitlements from a loan.  Commonly referred to as a partial,  We sold a few of these last year with 10% returns.  We have nothing to sell right now so this is not a veiled sales pitch, our last note has a soft offer on it that we intend to honor.  If buying an entitlement:
• you do not have to be accredited, 
• you can pick the notes you buy so get fist lien only, 
• they will usually be seasoned but if you are buying 3 years on a new note you would have a first lien on a 50 or 60k sale for 10-15k so a lot of equity protection.  You have first lien position while your contract is in place so other then being a headache a default should not be a huge financial hit, you are well secured.  A three year term is doable but not preferable, these are amortizing loans so your balance shrinks every month, after 18 moths you would only have a little over half the balance still paying interest.  I would consider a 5 year stream- it is more attractive to sellers too as they get more from the sale to re-invest in their next deal.
• most notes pay monthly, you can pick notes that meet your criteria.
• depending on the investment, the investment size is likely 10-15k depending on the monthly payment, 50k would get you 2-5 notes depending on the size and duration.
• your ITV would likely be well below 50%,  even on the 5 year term that I think is a better deal.  Check the numbers on any deal but this should not be hard.
• Servicing will already be in place, 
• yes it should be a passive investment, if not the seller will be scrambling to make sure you get paid in full.  remember you have a first lien, the seller does not want to lose 10-20 years of payments and the property because someone defaulted on your entitlement with a handful of payments left.
• 10% return should not be a problem, 
• buyback is likely to be a sticking point - a guarantee may violate SEC rules but the seller should have a very strong incentive to buy out your contract in the event of default,  (see #9)
• Home values around 100k are a bit of a stretch for a lot of seller fenced deals 50-60k is probably more realistic for Midwest properties.
• SDIRA is not a problem with buying an entitlement ( I sold a few to SDIRA's last year and it went very smoothly).

Rick Meloni · Answer

Hey it doesn't hurt to put it out there. These criteria seem to be what I've come up with in my studying of note investing over the past few weeks as the ideal note or fund. I knew it would get some peoples ire up but also was hoping to get some positive feedback. As I have stated to many of you I am 61yrs old and and am a product of the 08 crash like many, losing over 50% off my net worth. Maybe this is a pipe dream but after 08 I am diffidently gun shy, but I am seriously going to invest some of my SDIRA around Mid-February somewhere and I like the potential of investing in notes or note funds. Sorry if I came across as crazy. Maybe I need a mentor I can trust any suggestions??

Ian M. · Answer

@Rick Meloni I believe @Bob Malecki has a fund that meets many of these, though I'm not sure all of them.  Hopefully he can respond and fill in more details for you.

Is it possible to find a note or fund that has the following?

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