Which states would you recommend to buy NPNs in?

Question

I buy NPNs in MN, TX, TN, MS. Which other states you would recommend to buy NPNs in?

I'm looking for a quick foreclosure states with the shortest redemption period.

Ray Trounday · Answer

Pavel,

I would focus my attention on states that have non-judicial foreclosures. Georgia a good one.

Here is a link from Nolo with the list

https://www.nolo.com/legal-encyclopedia/chart-judicial-v-nonjudicial-foreclosures.html

Chris Seveney · Answer

@Pavel Sakurets - If you're looking to make 30k on each note and flip it in 6 months then you are limiting your buying and exit strategy to vacant properties in fast foreclosing states that are upside down on equity. Reason I say that is you will not be able to re-sell a note within six months because:

Month 1 is bidding, winning bid and due diligence (and maybe get it boarded) within that time

Month 2 you would need to wait the 30 day CFPB guideline before debt collection starts

Month 3 best case get them reperforming, then to sell as a performer need 12 months of seasoning.

With that option gone, you would need to get cash for keys for the property (in month 2) which still takes a few weeks to get an agreement in place etc. Say end of month 2 you get the property, then you need to list it for sale and sell it. To make 30k you would need to spend $150k - $250k (meaning property value between $200k-$300k). Based on that timeline, your also limiting your states to Georgia, Texas and Michigan which are fast foreclosure states and even then getting in and out of an asset in six months is still pretty fast.

With this business model, I would not recommend NPN's. You are better off buying off market deals so you can get a look at the inside of the properties. Buying NPN's which are vacant and trying to do a quick flip you have no idea what is inside and what to estimate for repairs.

@Rachel Luoto - What I refer to when I say harder are states that may require licensing, or have longer foreclosure, more tenant friendly, redemption periods. Now NY and NJ are just way out there so I do stay away, but Maryland is a good example of where I like to invest because of those items noted above.

Kimberly Banks Fawcett · Answer

@Pavel Sakurets Just a quick comment on GA -- they require a license to buy notes. Currently, it appears that you can buy up to 4 per year without having an issue but that may go away. So that could be a good way for you to get into one of the "has a higher hurdle so some people stay away, making prices better" areas while also enjoying a fast FC timeline. That is assuming, of course, that getting your license there isn't a beating in and of itself.

FC attorney in GA -- Beth Cruikshank. Tell her I sent you. She's in Atlanta. BP won't let me post her email address but it's her first name at her firm name.

Kimberly Banks Fawcett · Answer

Yup! It's not a debt servicing license which you get covered by a servicer. It's a debt owning/purchasing license. I am not an attorney nor do I play one on tv (lol) so go with the concepts and not the actual terms I'm using here.

Jay Hinrichs · Answer

for short turn around foreclosure time very few states beat Georgia

Rachel Luoto · Answer

Thanks for the input @Chris Seveney I was just wondering to someone last night if the "harder" things like longer foreclosure, 2nds, etc don't just get taken into consideration as higher risk for a lower bid. Glad to see someone is on the same wavelength!

Pavel Sakurets · Answer

Thank you Chris for your input. I'm looking for 30K gross profit from each NPN within 6 months because it takes the same amount of time to do a small deal as a large deal, but I don't want to wait a year and then get redeemed. I would prefer 6 months turnaround time so I could turn the money at least twice per year.

Jay Hinrichs · Answer

@Chris Seveney I understand the developers point of view with tough jurisdictions ...

LOL

Which states would you recommend to buy NPNs in?

Which states would you recommend to buy NPNs in?

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