Do you know a reliable company that can finance 1st NPNs?

Tax Liens & Mortgage Notes
6yFollow

Do you know a reliable company that can finance 1st NPNs?

Pavel Sakurets
Investor · Minneapolis, MN · Member since 2014 · 332 posts · 74 votes

Please share the name of the company that can finance non performing 1st liens. I know that Sharesates financed 1st liens, but they temp. don't

0Reply
13 views

Most Popular Reply

Andy Mirza
Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
6y

@Pavel Sakurets I don't know anybody who really does it. I know FCI or somebody affiliated with FCI was doing it several years ago but I don't think they do it anymore. From what I recall, the loans were offered at 12% similar to real estate hard money.

In my opinion, to make this kind of leverage work, you need something in the 4-5% range. Timelines to liquidation change too much unlike REOs or fix and flips.

We have one NPN in which the borrower filed Ch 13 BK and has been sub performing ever since. The trustee has been especially lenient and the debtor has been able to modify her plan three times. The last modification pushed out the payment plan for two more years. It's been three years and we haven't received a single payment on the arrears. If we had a hard money loan, we would have been killed on this one.

1Reply
See this reply in the discussion

5 Replies

Jump to latestLatest
  • Andy Mirza
    Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    @Pavel Sakurets I don't know anybody who really does it. I know FCI or somebody affiliated with FCI was doing it several years ago but I don't think they do it anymore. From what I recall, the loans were offered at 12% similar to real estate hard money.

    In my opinion, to make this kind of leverage work, you need something in the 4-5% range. Timelines to liquidation change too much unlike REOs or fix and flips.

    We have one NPN in which the borrower filed Ch 13 BK and has been sub performing ever since. The trustee has been especially lenient and the debtor has been able to modify her plan three times. The last modification pushed out the payment plan for two more years. It's been three years and we haven't received a single payment on the arrears. If we had a hard money loan, we would have been killed on this one.

    1Reply
  • Bob Malecki
    Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
    6y

    In this time of a potentially high future default rate as a result of Covid, finding financing for a performing 1st would be hard, but a NPL not likely

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    6y

    @Pavel Sakurets

    It’s like people who say they date super models, people talk about “knowing someone” or having done it but when you ask them to name a bank that they have used to hypothecate a note they go silent. Then will say, will in 2006, or well it was a commercial deal.......

    Put this one on the list next to big foot and Loch Ness monster

    7e investments53 Reviews
    WebsiteView Page
    1Reply
  • Pavel Sakurets
    OP
    Investor · Minneapolis, MN · Member since 2014 · 332 posts · 74 votes
    6y
    You win some and loose some. This is a part of the game. Yeah, borrower filing BK happens, but best on my experience in buying notes less than 5% file for BK
    Originally posted by @Andy Mirza:

    @Pavel Sakurets I don't know anybody who really does it. I know FCI or somebody affiliated with FCI was doing it several years ago but I don't think they do it anymore. From what I recall, the loans were offered at 12% similar to real estate hard money.

    In my opinion, to make this kind of leverage work, you need something in the 4-5% range. Timelines to liquidation change too much unlike REOs or fix and flips.

    We have one NPN in which the borrower filed Ch 13 BK and has been sub performing ever since. The trustee has been especially lenient and the debtor has been able to modify her plan three times. The last modification pushed out the payment plan for two more years. It's been three years and we haven't received a single payment on the arrears. If we had a hard money loan, we would have been killed on this one.

    0Reply
  • Andy Mirza
    Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    @Pavel Sakurets If you're doing this at a lower LTV on a portfolio of loans, I think it would be a good play if you could get the loan at a low enough interest rate, if that were even possible as Chris points out. I haven't heard of anyone recently who's admitted to actually getting a loan on a NPN.

    My business partner had prior partnerships that were set up like debt at 12% and that interest rate didn't work. He bought them out because his experience was that 12% was not sustainable.

    I wanted to point out with my comment that getting one loan for one NPN is very risky.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free