Hi Everyone. So I have been taking my time learning about non performing note investing and am approaching a comfort level where I might begin investing in them. I have a busy day job that I plan on continuing regardless. I have a former employee who I am close with who only works part time and would be excellent at a lot of the skills involved in non performing notes like networking with regional banks, even borrower reach out.
Does anyone have any experience or advice as to how I could most efficiently get this person working for me? I could probably just pay a salary but they would be more motivated if there were some incentive. I guess it’s important to point out that my strategy would be to hold on to any re-performing notes for cash flow.
I would rather not give away the farm because I’m coming up with the concept, providing them with all education necessary as well as doing all the funding.
Thanks in advance.
Hi John, I would recommend just treating them as an external contractor, this way you don't have to deal with payroll and taxes and the overhead that having an employee includes. I have my contractors sign and NDA and also execute a contractor agreement with my LLC which outlines their general duties and includes specific language that there is no employer-employee relationship.
Before bringing someone on board I would recommend starting out alone. Reason I say this you should learn the ropes and understand the process and time required before hiring someone. Also you will probably realize that until you get a decent size portfolio managing notes is like watching paint dry and you can have the servicer or a 3rd party company who specializes in borrower outreach do that for you for what will probably be cheaper than bringing someone on board.
Thank Chris. Thanks very helpful. I appreciate it.