Is it time to adjust your Note Investing Acquisition Strategy?

Question

All you hear is that inventory has dried up. Me personally, I’ve been working harder on expanding my network and going after larger take downs. I’m also looking at other Non-R/E Note opportunities.

What is the rest of the Note Universe doing?

Martin Saenz · Answer

Keep pushing and stay true to your focus.  If you seek institutional paper, the deals are out there.  I'm not into CFD's and rather stay with NPN's personally, so I understand.

Chad U. · Answer

Actually I don't mind the cfd space at all and find that the borrowers are often more cooperative than traditional mortgage holders. I'm finding higher reinstatement with these Borrowers, however many just cannot afford the payments no matter how low they are.  But given that these cfds can be picked up quite often so cheaply gives you as the lender a lot more leeway in working something out with them.

For instance one I'm working with right now was behind about 12 months on her payments but I agree to $1,000 reinstatement paid over 3 months on top of her regular $350 monthly payments. She is on a trial payment plan for 6 months and if she makes all payments I agreed to knock $10,000 off of her upb. So far so good. We only paid $8,500 for this cfd so the R O I will be astronomical.

Martin Saenz · Answer

Chad, I know little about you, but I would suggest looking at your circle and seeing if they are all into CFD's.  From that point, you may need to expand your circle (or change your circle) to incorporate folks dealing with institutional 1st and 2nds.  I was just at the MidAtlantic Summit and received several deals over the weekend by placing myself within the circle of the space I want to play in.

Martin Saenz · Answer

I'm at Dave Van Horn's conference and am looking at 3 potential opportunities:)  Love the abundance philosophy!

Chad U. · Answer

CFD's are the only thing that I've seen out there recently, so have been picking these up lately.  But they are definitely not for the faint of heart as these low end properties tend to be pretty poor shape.  You really need to be choosy and extra due diligence when you buy.  However, since you can pick them up for a song, if one or two deals goes bad (which will happen) then you're not losing your shirt and hopefully the rest make up for the loss.

Is it time to adjust your Note Investing Acquisition Strategy?

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