Closing on a performing 1st note - process, legal, due diligence
Before I pull the trigger to sign a Purchase and Sale agreement for a performing 1st note from FCI, I'd like to understand the ideal closing process.
Would you recommend I hire a local title company to preform a title search? I already have all the paperwork and I've researched the address heavily though the county websites and can see all the chain of assignments look correct. I'm not aware of any 2nds or municipal liens but I suppose the search would verify this.
How many of you get a lender's title policy (insurance) for notes? If so is this worth it?
What about taking the note assignment into a land trust within my LLC for an extra layer of privacy? Or is that overkill?
Most Popular Reply
It's only overkill if you think it is. Typically, if a loan was just completed, there is a recent lender's title policy to review. You can even call that title company about a quick search of title to make sure nothing new has popped up. You can purchase another policy yourself if you think it is needed.
Holding notes is simple compared to holding properties. There is no liability attached to a note. No one can trip and fall on a note and sue. You can hold the note in your personal name or LLC if you like.
I've handled over 4000+ performing note transactions and think the best vehicle is a SDIRA or SD401k to hold notes, then an LLC and then your personal name. All of which are great!