How many of you have bought a note this year ?

Tax Liens & Mortgage Notes
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How many of you have bought a note this year ?

Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

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?

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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
7y

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!

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  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y

    Our typical deal has at least 50% remains term and is an occupied asset. 

    0Reply
  • Daniela Reyes
    Member since 2018 · 19 posts · 4 votes
    7y
    Originally posted by @Jordan Blackwell:

    Closed on my 5th a few weeks ago! Your Good Deeds Note Investing podcast was a huge help in the process. Thanks, Chris (and Gail)!

     Hey Jordan , is this a Bigger pockets podcast ? Id like to learn more about this business , I dont have much knowledge in it .

    0Reply
  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y

    @Jay Hinrichs

    Our return requirements are upwards of 25%. As for our strategy, yes I do have to be comfortable with the fact that I may end up with the house but my sole focus is on getting the borrower reperforming. 

    If we are taking the house back, then I need to know on the front end that I’ve got a few exit strategies in place. 

    To name a couple:

    - As is value must allow for me and my investor to make the money we need to make.  I’m not in the business of rehabbing a home so I need a strong fire sale value.

    - Rental market is strong incase I turn the property in to a turn key rental and sell owner financed to investor

    As to your question regarding, doing owner financed deals here in Texas, I don’t want to be buying homes and fixing them up for a 10-15% yield.  I do do business in states that require us to be licensed, and that’s okay because we have volume there.

    0Reply
  • Jordan Blackwell
    Philadelphia, PA · Member since 2017 · 13 posts · 21 votes
    7y
    Originally posted by @Daniela Reyes:
    Originally posted by @Jordan Blackwell:

    Closed on my 5th a few weeks ago! Your Good Deeds Note Investing podcast was a huge help in the process. Thanks, Chris (and Gail)!

     Hey Jordan , is this a Bigger pockets podcast ? Id like to learn more about this business , I dont have much knowledge in it .

    Hi Daniela, it is not a Bigger Pockets podcast but you can find it through Chris' website. They have an Open Mic every Thursday which has quickly become one of the most helpful resources (outside of BP forums) that I've found. Also make sure to check out Scott Carson's videos on YouTube/Vimeo. He has great content. Hope that helps!

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Logan Hassinger:

    @Jay Hinrichs

    Our return requirements are upwards of 25%. As for our strategy, yes I do have to be comfortable with the fact that I may end up with the house but my sole focus is on getting the borrower reperforming. 

    If we are taking the house back, then I need to know on the front end that I’ve got a few exit strategies in place. 

    To name a couple:

    - As is value must allow for me and my investor to make the money we need to make.  I’m not in the business of rehabbing a home so I need a strong fire sale value.

    - Rental market is strong incase I turn the property in to a turn key rental and sell owner financed to investor

    As to your question regarding, doing owner financed deals here in Texas, I don’t want to be buying homes and fixing them up for a 10-15% yield.  I do do business in states that require us to be licensed, and that’s okay because we have volume there.

    when you say licensed i was not aware that you need a license to buy existing paper as a principal. ??  are you talk about originating owner occ seller carry backs ??  

    I can see 25% and above for all that work..  I always wonder why folks would do this for 10 to 15% when you can buy perfectly good already performing new origination's.  as opposed to re performing

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  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y

    @Jay Hinrichs

    Georgia for example requires us to be a licensded mortgage broker as we are considered to be brokering Mortgage loans. 

    Any loan secured by Georgia Real Estate, which is the borrower’ssprimary residence requires us to hold the licenses. 

    I agree with you on the returns. It makes no sense to go through all this work for such little return. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Logan Hassinger:

    @Jay Hinrichs

    Georgia for example requires us to be a licensded mortgage broker as we are considered to be brokering Mortgage loans. 

    Any loan secured by Georgia Real Estate, which is the borrower’ssprimary residence requires us to hold the licenses. 

    I agree with you on the returns. It makes no sense to go through all this work for such little return. 

    is this becasue your are brokering for others and its not your companies internal funding ?  I get it on the owner occ stuff I am NMLS and state licensed in Oregon.. and i think I recall that some states now require some sort of servicing license for owner occ mortgages. ??

    I try to stay abreast of the rules..

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  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y

    @Jay Hinrichs

    We are buying strictly for our own portfolio. No brokering here. 

    And you’re right about the mortgage servicers. Many states are now requiring a servicing licenses. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Logan Hassinger:

    @Jay Hinrichs

    We are buying strictly for our own portfolio. No brokering here. 

    And you’re right about the mortgage servicers. Many states are now requiring a servicing licenses. 

    so GA requires you to have a state mortgage brokers license and NMLS to buy existing notes ??  thats pretty restrictive

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  • Greg Baca
    Barstow, CA · Member since 2018 · 9 posts · 7 votes
    7y

    @Chris Seveney this might sound dumb, but what exactly is a note?

    0Reply
  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y

    @Jay Hinrichs

    You got it lol. 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    OP
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    7y
    Greg
    A note is a loan. So if you buy a house and finance it from Wells Fargo, you sign a promissory note ("note") and a mortgage / deed of trust which secures the note to the property.

    Most investors are unaware that there is the niche market of investors who buy and sell notes. You can buy either performing notes or non-performing.

    Originally posted by @Greg Baca:

    @Chris Seveney this might sound dumb, but what exactly is a note?

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  • Charles Mitchell
    Member since 2018 · 103 posts · 48 votes
    7y

    Still learning the process of buying notes. I'm currently looking into scott Carson's training. I'm also actively looking for someone who has been in the business to learn first hand how the note investing industry operates.

    0Reply
  • Edwin L.
    Real Estate Investor · San Francisco, CA · Member since 2014 · 104 posts · 21 votes
    7y

    Hey gurus, when I see investors on this thread purchasing 10-20 notes, are these personal investments to hold or you buying and selling?  This seems interesting and like to learn a bit more.  Thanks!

    0Reply
  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y

    @Edwin L.

    We are buying, selling and holding for our own portfolio utilizing investor capital. 

    0Reply
  • Ikenna Okafor
    San Antonio TX · Member since 2014 · 32 posts · 3 votes
    7y

    how can i learn how to purchase notes?

    0Reply
  • Jason Graves
    Rental Property Investor · San Diego, CA · Member since 2018 · 242 posts · 234 votes
    7y

    @Shiloh Lundahl

    I would be interested in talking to you about how your doing this.

    Can we talk?

    0Reply
  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    7y

    @Joe Ort The way we do it isn't like the note investing that they are talking about here.  There is a much more in depth process for note investing that requires a lot of knowledge, experience, or work to get there.  The notes that I create are simple.  Here is an example.  Say I have a property worth 180k, but when I got it financed it was only worth 140k and the bank lent me 100k.  Now I have 80k in equity in the property and the cash flow is 450 a month.  I may sell a second position note note for 40k at 8-10% interest for someone who just wants some passive (mailbox money) cash flow.  I would share the cash flow ($266 - $333 a month) but then I could take that 40k and get a couple more properties.  I am happy because I am able to scale to more properties and the note investor (really private money lender whose loan is secured by a deed of trust on the property) is happy because they get their monthly cash flow.

    That's how I do it.

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  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    7y

    @Jason Graves See example on previous page.

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  • Dawn Burwell
    Rental Property Investor · Overbrook Hills, PA · Member since 2019 · 84 posts · 26 votes
    7y

    @Chris Seveney note????

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    OP
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    7y
    If they are non-performing (borrowers not paying) your looking at 12-18 months. Depends on state, sometimes its faster sometimes it is much longer.

    Originally posted by @Edwin L.:

    Hey gurus, when I see investors on this thread purchasing 10-20 notes, are these personal investments to hold in your own portfolio? How long do you normally hold these notes before reselling them? This seems interesting and like to learn a bit more.  Thanks!

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  • Chris SeveneyBusiness Member
    Moderator
    OP
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    7y

    A note is a loan. So if you buy a house and finance it from Wells Fargo, you sign a promissory note ("note") and a mortgage / deed of trust which secures the note to the property.

    Most investors are unaware that there is the niche market of investors who buy and sell notes. You can buy either performing notes or non-performing.

    Originally posted by @Dawn Burwell:

    @Chris Seveney note????

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  • Dawn Burwell
    Rental Property Investor · Overbrook Hills, PA · Member since 2019 · 84 posts · 26 votes
    7y

    Thank you for explaining :) 

    0Reply
  • Joe Ort
    Jacksonville, FL · Member since 2018 · 38 posts · 20 votes
    7y

    @Shiloh Lundahl - got it. I've read something similar in the past.  

    0Reply
  • Jacob Smith
    Rental Property Investor · Billings, MT · Member since 2019 · 2 posts · 0 votes
    7y

    Bought my first multi - family home! 3rd property in 10 years, looking to buy more this year hopefully

    0Reply
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