How many of you have bought a note this year ?

96 Replies

As we are now 8 weeks into the year, have you bought a note (or CFD)? If not what is holding you back.

Have you found a mentor to work with to assist you on what is holding you back?

Personally I've purchased 10 notes so far this year in various joint ventures and in our private equity fund we just acquired 66 second position notes. So far so good!

Since I started January of this year, I have bought 2 notes, sent out a bid for 6 more assets last week and waiting for another tape this week to review. 

Congrats to you guys. I much prefer creating notes. 2 so far this year and working on 2 more. Although I am intrigued by the note business I don't think I could handle the due diligence part. After being in the office for 2 hours I have to find a house or a roof to go look at.

Originally posted by @Logan Hassinger :

We have closed on 2 so far and waiting for bid acceptance/counters on another 39. 

Helping investors achieve some passive cashflow. 

 when you say bids on 39.. does that mean if you win the bid you will nail all 39 or just some of them

and what are your ratios basically ?  bid on 39 expect to land 5  type of thing.. just curious and think it would be good info for the audience.

Originally posted by @Bob Malecki :

Personally I've purchased 10 notes so far this year in various joint ventures and in our private equity fund we just acquired 66 second position notes. So far so good!

wow 76 notes all NPN or are some performing.. if NPN that seems like lots of work ahead of you.. !!

Originally posted by @Logan Hassinger :

@Jay Hinrichs 

Great question Jay. I’m expecting to close on no more than 10. 

As for a closing ratio, we expect an average of 15-20% to close. 

thank you.. when I was looking at larger tapes in the Crash.. those that were 5 to 10million.. we had to take them all .. 

it was quite frustrating trying to figure out who was real.. we get frustrated with wholesalers in real estate.. daisy chain in notes was off the charts.. I suspect its not like that now.

@Logan Hassinger

I see people posting a note for sale on Facebook and others copying the post and selling it as if it is their own

In regards to hit rate- if I bid on 15, I probably get 5 accepted and 5 legitimate counters. Of the 10 I end up closing on 60% due to issues with title etc.

one of the most frustrating things for me is the quality of the paper and sellers not disclosing this so you order a title report and that money goes out the door. My hit rates have gone up over past year because I know what the sellers tendencies and bid on what I want and I know will fit their sales cost profile.

Hi note gurus, other than reading Dave Van Horn's book (which I just bought) on note investing, are there any other good resources to learn more about how to get started, evaluate and find notes for sale? 

Updated over 1 year ago

And do notes count toward your limit of 10 financed properties?

@Chris Seveney

Purchased one note this year, $2.2 million principal balance paid $1.78 million. Note has 13 years left, annualized ROI 11.88%

Have a transaction set to close Feb 27. To avoid usury in new note we are doing sale/leaseback/repurchase. Essentially lending $2.5 million for 7 months and receiving back $2.985 million. 19.4% return, 33.5% return annualized.

We don’t compete in the residential note market, preferring to concentrate on commercial real estate notes.

Originally posted by @Chris Seveney :

@Logan Hassinger

I see people posting a note for sale on Facebook and others copying the post and selling it as if it is their own

In regards to hit rate- if I bid on 15, I probably get 5 accepted and 5 legitimate counters. Of the 10 I end up closing on 60% due to issues with title etc.

one of the most frustrating things for me is the quality of the paper and sellers not disclosing this so you order a title report and that money goes out the door. My hit rates have gone up over past year because I know what the sellers tendencies and bid on what I want and I know will fit their sales cost profile. 

for me I wont do any of these deals without fresh title insurance.. I get it though be expensive pulling title .. only to not buy the note.

sounds like daisy chains are still out there.. just the note version of  no money wholesalers that are rampant in the fixed asset space.