NPL Financing - Sharestates

6 Replies

My colleague @Chris Seveney looked into it and here was his response:  

PSA
Some of you may have seen some people posting on other sites about a company that will finance NPL's. These people are brokers who get a commission for a company called sharestates. As an FYI I spoke with them and their terms are for notes only (no cfd's), they charge 12% + 3 points and will fund up to 50% of appraised value (which requires a full blown $500 appraisal - oh which needs to be interior as well) and up to 80% of UPB. Min. Single loan amount is $100k

It is brand new and they did not appear to know a lot about notes as I told them you will not get an appraisal with interior inspection and he did not know how to respond.

PRNEWSWIRE.COM Sharestates Offers Non-Performing Loan Financing Nationwide

Real Estate Crowdfunding Company Sharestates Launches New Non-Performing Loan Financing in 4

Originally posted by @Chad U. :

My colleague @Chris Seveney looked into it and here was his response:  

PSA
Some of you may have seen some people posting on other sites about a company that will finance NPL's. These people are brokers who get a commission for a company called sharestates. As an FYI I spoke with them and their terms are for notes only (no cfd's), they charge 12% + 3 points and will fund up to 50% of appraised value (which requires a full blown $500 appraisal - oh which needs to be interior as well) and up to 80% of UPB. Min. Single loan amount is $100k

It is brand new and they did not appear to know a lot about notes as I told them you will not get an appraisal with interior inspection and he did not know how to respond.

PRNEWSWIRE.COM Sharestates Offers Non-Performing Loan Financing Nationwide

Real Estate Crowdfunding Company Sharestates Launches New Non-Performing Loan Financing in 4

Hey guys you are fully entrenched in this business I am not.. but even the tiny bit I know about NPN this seems impossible to do.

how are you going to get in the house ???  only way that happens if its vacant .. owner occ does not have to let a lender in.. these are not tenants they are owners..  RIGHT ?

and given that returns on these are right at 15 to 20% kind of best case for any volume ( granted I know we all hit our homeruns sometimes) but how can you pay that rate and make any money on the delta.. you would need to be buying pretty big tapes and then you would owe them money while your not making any money stabilizing the collateral.. unless their interest payments are on accrual.. ????? 

if these guys have the money I would think it make more sense for them to just bring note ACK in house and do it themselves.. ?

@Jay Hinrichs I think as @Chris Seveney pointed out in his conversation with them is that they don't have a clue on what they are lending on.  If they want an interior appraisal they will soon find out this isn't possible, so may reconsider their lending criteria.  

And it would be suicide to take an HML loan on an NPN. If it got dragged out for 2+ years because of a BK or a defiant borrower who contested every step of the foreclosure process, would soon find yourself deep in interest debt.

I'm in discussions in setting up a potential partnership with an investment group where we'll pay a 8% pref to the investors, but that would be the max risk I would be willing to take.  

My one and only experience with Sharestates was with a portfolio loan that included six properties. Sharestates demanded an upfront $495 deposit per property, about $3,000 before even approving the loan. Going over the term sheet, I saw language in a footnote that said I don't have to pay a deposit if I use Sharestates title company. First they tried to convince me that that is not what the footnote meant. I explained that it was in English and I happen to know English really well. They said they would have to get with their attorney and let me know. I was called back and told that I was right, that is exactly what the language meant, but that it was an obsolete term sheet template. Uh-huh. I believe it was a CYA that I guess a lot of people don't catch. They said they would go ahead and honor the language and waive the deposit. I haven't heard from them since despite trying to call them several times. 

Count your fingers after shaking hands with the folks at Sharestates!