Note Tape Due Diligence - First Step

6 Replies

What is the first step you take when you receive a NPN Note Tape?

Just measuring what everyone is doing.  For myself, I reformat the spreadsheet so that it reads well for myself.

First thing I do is save a copy of the original. Then I create a 'working' version of the file and add a sheet where I copy my due diligence checklist into. Having all of the originals allows me to do quick checks on future tapes to see if they have been recycled. Then having a checklist in each tape file I can tick off ensures I don't miss anything. This is helpful for picking up where I left off when I am busy and can't go through everything in one sitting.

The first real steps are running through some initial filters for things like: key states, property type, loan balance, est value, etc.

  • I first confirm the seller is legit, if from someone I haven't dealt with before.  
  • The next step I sort it into geographic locations that I already have a presence and team setup.  
  • I'll then import those deals into my "Bidding" app in Podio as I've got it setup to view the map location and automatically gives me the Google street image of each property
  • The Bidding app also gives me the Zillow estimates, bed, bath, year built, sq ft, etc
  • It then automatically pulls comps and a map of the comp locations, but I also run these through my Comp analyzer to give me the bottom and top 5 comps average which is a ballpark 'as-is' and ARV
  • From there I run them through my portfolio pricing modeler to determine a price on each

I can generally do this within a couple of hours for a tape of any size.   

Originally posted by @Dan Deppen :

First thing I do is save a copy of the original. Then I create a 'working' version of the file and add a sheet where I copy my due diligence checklist into. Having all of the originals allows me to do quick checks on future tapes to see if they have been recycled. Then having a checklist in each tape file I can tick off ensures I don't miss anything. This is helpful for picking up where I left off when I am busy and can't go through everything in one sitting.

The first real steps are running through some initial filters for things like: key states, property type, loan balance, est value, etc.

 Dan, this is nice.  Sounds like you have a consistent process that works for you.  

Originally posted by @Chad U. :
  • I first confirm the seller is legit, if from someone I haven't dealt with before.  
  • The next step I sort it into geographic locations that I already have a presence and team setup.  
  • I'll then import those deals into my "Bidding" app in Podio as I've got it setup to view the map location and automatically gives me the Google street image of each property
  • The Bidding app also gives me the Zillow estimates, bed, bath, year built, sq ft, etc
  • It then automatically pulls comps and a map of the comp locations, but I also run these through my Comp analyzer to give me the bottom and top 5 comps average which is a ballpark 'as-is' and ARV
  • From there I run them through my portfolio pricing modeler to determine a price on each

I can generally do this within a couple of hours for a tape of any size.   

 Chad, do you use RealtyTrac at any point?

Originally posted by @Martin Saenz :
Originally posted by @Chad Urbshott:
  • I first confirm the seller is legit, if from someone I haven't dealt with before.  
  • The next step I sort it into geographic locations that I already have a presence and team setup.  
  • I'll then import those deals into my "Bidding" app in Podio as I've got it setup to view the map location and automatically gives me the Google street image of each property
  • The Bidding app also gives me the Zillow estimates, bed, bath, year built, sq ft, etc
  • It then automatically pulls comps and a map of the comp locations, but I also run these through my Comp analyzer to give me the bottom and top 5 comps average which is a ballpark 'as-is' and ARV
  • From there I run them through my portfolio pricing modeler to determine a price on each

I can generally do this within a couple of hours for a tape of any size.   

 Chad, do you use RealtyTrac at any point?

 I used to have a subscription with them a few years ago when I bought at courthouse auctions, but not lately.  How accurate is their data?  I had a trial subscription with DataTree a couple months ago, but found their data grossly inaccurate or outdated.  For instance, on one note I bid on, the property had $10K+ taxes outstanding, but in their system showed as current.  On another, the AOM's and other records reflected an entirely different property.  After that I lost ALL faith in all data information providers and do the research manually (ugh).     Of course , this is after the bid is accepted and phase 2 of DD.