Want to to get some of your thoughts on your note bidding criteria.

From what I'm gathering there is a fine line between bidding aggressively and "low-balling". So I hear 'if you are getting lots of bids accepted you are bidding too high' and 'I have made x amount of bids and only had 2 or 3 accepted' and 'you don't want to offend someone by bidding too low' and maybe even as extreme as 'you can run the risk of getting blackballed'. I know there is nothing concrete but maybe a few examples or tricks. I have heard no lower than 42% of UPB and that you can give your indicative offer and then try to shave down your offer after you dig deeper into the situation. I realize that once you have more familiar relationships with people that you might be able to break some of these barriers but anything anyone would like to add would be appreciated.

I agree with @Chris Seveney . Starting with the stair-step method is a great starting point, but fine tuning the bid based on your ROI calculator is needed to finalize. Most hedge fund managers will understand if you have a basis for your aggressive bid. Yet, each manager is different.................

Here is what I would suggest for bidding on non-performing 1st liens. Anything over $50K in value, you have to expect to be bidding at 55% of FMV (Fair Market Value). Anything in the $40's, 45% of FMV. Assets valued in the $30's, 35% of FMV. Anything below $30K I would not bid more than 25% of FMV. FMV is AS-IS Value! Not AFTER REPAIRED VALUE! Now some of the things that will affect your bid. If it is in a fast foreclosure state like NC, GA, TX, AZ, NV, & MO you would probably need to add 5% or more to your bid. If it is in a longer foreclosure market like FL, SC, NY, NJ or other states, you would reduce it by 5%. This only holds true unless the foreclosure process has begun and you are close to a final judgment/auction date. And in that case, you would need to probably bid closer to 60% because all of the legal work is done. If it is in a rural area, reduce your offering by 5-10% (or don't do the deal!). If it's in a hot market, expect to pay more for it. If you are buying or cherry picking from the usual suspects who send out their lists on a regular basis, expect to pay 5-10% above this pricing unless you are taking some of lower "junk" to offset you taking the cream of the crop. If there are over $1000 in taxes owed, reduce your stairstep bid by that amount.

Make sure to ask the seller what their model is.  If they want performing/reperforming notes, then they may only sell the vacant, non-performing notes that they've already started legal on and you may be paying more as they've already done some of the outreach.  If they bought the note as a performer or BK CH 13 note, then they may not be able to sell it at the stairstep price because they overpaid for it.  There are a lot of factors in this fuzzy math.