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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  • Patrick Roane
    Property Manager · Fox River Grove · Member since 2009 · 39 posts · 9 votes
    7y

    We are relatively new to the game and don't know much about investing in notes but would be interested in learning and eventually getting something going for sure! The question for the community is where to start?

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

    @Patrick Roane

    Where to start would be based on your method of investing (active vs passive) and what area of notes (1st's or 2nd's, performing vs NPN, residential vs commercial)

    Are you looking to be an active participant  which includes; marketing for deals, Due Diligence, servicing (strongly recommend using a 3rd party)?

    Or more of a passive investor looking to place idle funds or 401k dollars to work?

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

    @Patrick Roane

    Where to start would be based on your method of investing (active vs passive) and what area of notes (1st's or 2nd's, performing vs NPN, residential vs commercial)

    Are you looking to be an active participant  which includes; marketing for deals, Due Diligence, servicing (strongly recommend using a 3rd party)?

    Or more of a passive investor looking to place idle funds or 401k dollars to work?

    to tag on here.. there is a company in Portland Oregon. that is a large very successful HML who has a note fund.. it has a call feature IE you can call your funds in 30 days.. they pay 6% and its the bottom of the capital stack.. that is about as safe and passive as it gets .

    we put money there while we are waiting on deals to mature.  I do not work for them .. just love what they do..

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

    @Jay Hinrichs

    Hey Jay, I just realized what your signature says. I was glad to be apart of Ben Leybovich’s PSW 2019 event last month, which was then able to make a donation to your non profit. 

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

     Thanks Jordan !

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Logan Hassinger:

    @Jay Hinrichs

    Hey Jay, I just realized what your signature says. I was glad to be apart of Ben Leybovich’s PSW 2019 event last month, which was then able to make a donation to your non profit. 

    Well thank you Logan  I saw Ben Last weekend in Oakland and I think they raised about 11k for aheroshome.. and we did about another 20k at the Oakland event we are getting real close to our goal and our dream of donating a home to a Hero.. Thank you very much for your support its deeply appreciated ..  Its really cool when a group of real estate investors who have no experience in charity work ( other than donating) come together and pull this off..  !!! 

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  • Vania Castillo
    Investor · New York City, NY · Member since 2013 · 137 posts · 50 votes
    7y

    Filling the paperwork for my fist one this year and have 4 performing very well.  Two of them were basically seller financing.  I sold the properties and finance them too.  My notes are short term, usually a year.

    1Reply
  • Jian G.
    Rental Property Investor · San Diego, CA · Member since 2019 · 102 posts · 43 votes
    7y

    @Chris Seveney

    Need to looking into it, just don’t understand it fully yet. Looks like some people are making a great return. Do most people do commercial note?

    0Reply
  • Logan Hassinger
    Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Logan Hassinger:

    @Jay Hinrichs

    Hey Jay, I just realized what your signature says. I was glad to be apart of Ben Leybovich’s PSW 2019 event last month, which was then able to make a donation to your non profit. 

    Well thank you Logan  I saw Ben Last weekend in Oakland and I think they raised about 11k for aheroshome.. and we did about another 20k at the Oakland event we are getting real close to our goal and our dream of donating a home to a Hero.. Thank you very much for your support its deeply appreciated ..  Its really cool when a group of real estate investors who have no experience in charity work ( other than donating) come together and pull this off..  !!! 

    I couldn’t agree more. Keep it up guys. 

    0Reply
  • Andrew Flora
    Rental Property Investor · North Vernon, IN · Member since 2018 · 136 posts · 192 votes
    7y

    what is the best website to buy notes?

    0Reply
  • Boyd McClean
    Investor · Adkins, TX · Member since 2012 · 193 posts · 93 votes
    7y

    Created 5 notes so far this year.

    0Reply
  • Martha Sojka
    Member since 2019 · 2 posts · 0 votes
    7y

    @Shiloh Lundahl

    Is that like “refinancing” to get equity out of a property but you are doing that with an investor instead of a bank? If so, does the principal loan holder get involved/notified?

    0Reply
  • Steven Persons
    Rental Property Investor · Milwaukee, WI · Member since 2018 · 4 posts · 0 votes
    7y

    Where may I find more information about notes?  After gaining a better understanding, I hope to come back and answer "yes."

    0Reply
  • Liza B.
    Specialist · McAllen, TX · Member since 2016 · 21 posts · 23 votes
    7y

    @Steven Persons Check out @Scott Carson YouTube videos that will teach you a lot about note investing. There are a lot of information on his free stuff. He also has some classes that you can check out. Good luck!

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

    @Martha Sojka it is not like refinancing. It is taking out a second on the property to take out some of the equity by creating a loan for a private money lender.

    The lender in first position does not get involved. The lender that I have the majority of these loans with knows what I am doing and how I am doing it and it has not been a problem with him.

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  • Martha Sojka
    Member since 2019 · 2 posts · 0 votes
    7y

    @Shiloh Lundahl

    Thank you!

    0Reply
  • Derek Guivehchi
    Rental Property Investor · Dyersburg, TN · Member since 2019 · 45 posts · 31 votes
    7y

    @Jay Hinrichs

    Do you mind sharing some contact info for the note fund in Oregon you mentioned? Thanks

    0Reply
  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    7y

    I have only bought 2 notes, and I have created 2 notes which I still hold.  None have been done this year.  Could you provide advice or a location to look for notes that are in the state of Wyoming?  I would prefer to invest in the state I do business in, but have not figured out how to find them.

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

    @Jay Hinrichs

    Do you mind sharing some contact info for the note fund in Oregon you mentioned? Thanks

     PM me I don't think we can advertise for companies.

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  • Kevin Vandenboss
    Real Estate Broker · Lansing, MI · Member since 2015 · 90 posts · 53 votes
    7y

    I just got into note investing last year.

    So far it has just been non performing notes with the goal of getting them re performing. Since my portfolio is still really small I'm able to work them pretty aggressively. I've had fairly good luck with seemingly hopeless notes so far.

    0Reply
  • Deanna O.
    Rental Property Investor · San Diego, CA · Member since 2010 · 377 posts · 314 votes
    7y

    Just bought my very first NPN!

    Paperwork & $ changed hands last week. Assignment of the note filed yesterday, recorded as of midnight, foreclosure starts today. Badly distressed property, heavily discounted note, tax lien would have had the property auctioned off in May if I hadn't stepped in. 

    Plan A is refi/rehab/rent, but I'm open to other options should they present themselves (if someone were to bid the full Foreclosure auction price I'd be ecstatic!). 

    0Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    7y

    The biggest divide in the note business, or note investing isn't between passive and active, residential and commercial, or 1st or 2nd. Its between performing and non performing! Performing note investors are looking for an income stream that maybe will result in a larger ROI if either they can 'work the note' or purchase the note at a discount and receive an early payoff. Buying non performing notes, whether hoping to make them re preforming, or foreclosing to gain ownership of the property and either fix and hold for rental income or sell is a much more intense and active business endeavor. Putting together a portfolio of paying notes seems like an investment program, buying NPN seems like a business.

    While I mostly buy and syndicate performing notes, we do occasionally purchase NPN as well. NPN are A LOT more work, no immediate cash flow, and usually additional capital needs to be invested before we can see a return. So it only makes sense if the risk adjusted return is greater. In my personal experience, that has not been the case. But since I have been able to achieve an 18% + average weighted return on my performing note portfolio, my situation may not be the general experience.

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    7y

    Please note: advertising, self promotion and deal making is not allowed in the forums and those posts will be removed. However, mentioning the name of a company you are NOT associated with is fine, @Jay Hinrichs.

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

    The biggest divide in the note business, or note investing isn't between passive and active, residential and commercial, or 1st or 2nd. Its between performing and non performing! Performing note investors are looking for an income stream that maybe will result in a larger ROI if either they can 'work the note' or purchase the note at a discount and receive an early payoff. Buying non performing notes, whether hoping to make them re preforming, or foreclosing to gain ownership of the property and either fix and hold for rental income or sell is a much more intense and active business endeavor. Putting together a portfolio of paying notes seems like an investment program, buying NPN seems like a business.

    While I mostly buy and syndicate performing notes, we do occasionally purchase NPN as well. NPN are A LOT more work, no immediate cash flow, and usually additional capital needs to be invested before we can see a return. So it only makes sense if the risk adjusted return is greater. In my personal experience, that has not been the case. But since I have been able to achieve an 18% + average weighted return on my performing note portfolio, my situation may not be the general experience.

    you have a definite herd mentality coming into the NPN space.. those that have the capacity and tenacity to work those notes will do fine those that think they can take a course and think these are in some way an investment.. some of those folks are going to find out how tough it is and how regulated it is.. but just like anything. the harder you work the better the outcome.. Like you my thought is if I am going to knowingly invest in a defaulted situatin there better be some huge upside.. other wise why bother. there are 38 states a Person can make a commercial non owner occ loan in and get a nice 12 to 15% return with not near the effort and risk. NPN = a JOB not an investment per se. At least in my mind..

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

    @Jay Hinrichs

    💯 correct - I would have to imagine that 80% of people who take a course two years later are no longer doing what that course was based on.

    Like any business there is a lot of hard work Involved. You will here stories of people making $50k on a deal but they most likely have put in 1000’s of hours to end up at that point which most of the time occurs due to a certain type of luck

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