Note Investing Team

[Collin Kautz]

To the active note investors out there:

1) Who would you consider essential to your note investing team? (Other than yourself!)

2) Follow up question - Why?

[Dave Van Horn]

Good question Collin.

Like Bill said, depending on the types of notes and exit strategies (holding, flipping, etc), it could differ. For example, I technically started out in the note business by originating 1st mortgage rehab loans for real estate investors, and that I basically did by myself without a team.

Now with institutional notes, my experience has been different. I started out with and still have two other partners in my note company - one for acquisitions, one for borrower management, and I raise money and manage the investor relations department. Now years and years ago when we started out (with just 4 loans! LOL) we didn't know what roles would fit us best so we tried multiple different things with moderate success, but we all eventually found our niche within our partnership. Then we started to expand once we began to recapitalize on the notes we purchased. We then raised more private money (which became easier and easier) and began to hire more employees - first a secretary, then an accountant, then an IT guy, assistants for the partners, asset managers to work more loans, then their assistants, marketing, etc. Which one of those do I consider essential to me now? All of them, that's why I hired them! But the important thing is you build the team as you go, and speaking from experience you usually will realize who you need when you need them.

But I do know many a note investor who starts out solo, but the ones that seem to want to really grow tend to form partnerships somewhere down the line. But it all depends on how you want to work. That's the beauty of notes, it can be a one-man operation or a large organization. If you enjoy working alone you certainly can, you could also have an admin to help you with paperwork and/or accounting and it can it always stay that simple. With institutional notes (especially 2nds) it's not difficult to work nationwide with a good network of attorneys as well (that IS essential).

So it really depends on you, how do you want to work notes? Do you want to become a large fund or do you want work by yourself?