Institutional Note Funding

11 Replies

You can as you can with real estate.

However the more relevant question is should you? Have you bought or worked out a note before? You should never never ever buy notes with other people's money unless you know what you are doing.

@Lester White

This depends on you and your experience and expertise.

Can you get someone to pay you to paint a picture, or pay you to fly them across the country?

If not, why? The answer to this question will be the same as you are looking to get people to pay you to perform a task (make them money).

Okay thanks for the response...is it possible to partner with an Note investor looking for a speciate note criteria of lets say, 1st position SF, Minimum Investment of 100Kk, at 8% , for 10 years and I come across a note that's fits his criteria and I JV with "0" money in on my behalf for a purchase price of 100K for the investor and split the monthly payment something like 20/80, 10/90 ? Would this be considered a finders fee ?



Hi again. So the answer to your question is essentially no. And yes. So people will pay you a finder's fee but there is no way that they will pay you a finder's fee of 10 or 20% at most be 3%. I think that you are trying to bring the wholesale or bird dog model that you have with real estate into the note space. And that doesn't quite work the same over here. People will pay you a finder's fee or a broker's fee but the only time that people will JV with you is if you are bringing experience, knowledge, money, or something else valuable to the table.

My other question would be how did you find this performing note? Typically you have to market in order to find them, which still requires money unless somehow you have a contact with a seller. And sometimes to be a note broker depends on the state where you live. In California you have to be a licensed re broker to do California notes and soon everyone will have to have some type of license to work in the note space.

An experienced note seller does not care about you.  They care about selling their note.  I'm just being honest. But I think we are getting a bit sidetracked.

Your question was: "is it possible to partner with an Note investor looking for a speciate note criteria of lets say, 1st position SF, Minimum Investment of 100Kk, at 8% , for 10 years and I come across a note that's fits his criteria and I JV with "0" money in on my behalf for a purchase price of 100K for the investor and split the monthly payment something like 20/80, 10/90 ? Would this be considered a finders fee ?"

Let me reiterate. If you can bring to an investor that wants such a note, sure you can be paid for that. Whether you call it finders or broker, it doesn't matter. But what I was trying to say is that I as a person who buys notes, would never give you that much for such a note or JV with you just because you brought me a note. It would be more like 3%. Notes are easier to find than an off market beat up house.. a situation where theoretically I may be more inclined to JV with that person.

I have to be honest here.  Whoever told or suggested to you the 0 money down concept as it pertains to notes is wrong or misleading at best.  It *CAN* happen with a few caveats.  But the most common way for new people to get into notes with the least amt of $$$ possible is either buying a cheap note, wholesaling a note, and/or possibly study under a note investor so that they can understand what to do.

I think for you, step 1 is get education.  Read up and watch youtube videos and podcasts from several of the note educators out there.  Step 2 is network with NOTE SELLERS and BUYERS.  But please please do step 1!!!!  Because if you do not, not only will you not be able to get OPM for notes, buyers and sellers will not take you seriously.

These are my thoughts. DM me if you have questions.

@Lester White :I understood that part about who you are JVing with...

Given the sample terms you stated above, the payment would be $1213 less servicer fees. Where are you sourcing that note from? Or was that just an example?

What is strange to me is why would your partner in that case give you $120, $240, or so a month for 10 yrs when they could give you $3k upfront and call it a day. That is very odd to me.

I agree with Terrence. There are gurus out there who will tell you that you can do this with no money and just post on FB and other sites about JV deals (which is an SEC violation) but that is not the case. Also if you were considering wholesaling, in this business if you even want to get a 5 second conversation with a note buyer you need to broker a note where you know the servicer, pay history, sellers color, how much hair is on the note, and legal and title status as well as property value and know what the property currently looks like.

If you cannot answer these (or know what some of them mean), you will not be successful and may end up blackballing yourself. First impressions are big in this business and if you are deemed a joker broker from the start, it is tough to overcome it.

So as Terrence mentioned get educated.



Originally posted by @Terrence Evans :

An experienced note seller does not care about you. They care about selling their note. I'm just being honest. But I think we are getting a bit sidetracked.

Your question was: "is it possible to partner with an Note investor looking for a speciate note criteria of lets say, 1st position SF, Minimum Investment of 100Kk, at 8% , for 10 years and I come across a note that's fits his criteria and I JV with "0" money in on my behalf for a purchase price of 100K for the investor and split the monthly payment something like 20/80, 10/90 ? Would this be considered a finders fee ?"

Let me reiterate. If you can bring to an investor that wants such a note, sure you can be paid for that. Whether you call it finders or broker, it doesn't matter. But what I was trying to say is that I as a person who buys notes, would never give you that much for such a note or JV with you just because you brought me a note. It would be more like 3%. Notes are easier to find than an off market beat up house.. a situation where theoretically I may be more inclined to JV with that person.

I have to be honest here.  Whoever told or suggested to you the 0 money down concept as it pertains to notes is wrong or misleading at best.  It *CAN* happen with a few caveats.  But the most common way for new people to get into notes with the least amt of $$$ possible is either buying a cheap note, wholesaling a note, and/or possibly study under a note investor so that they can understand what to do.

I think for you, step 1 is get education.  Read up and watch youtube videos and podcasts from several of the note educators out there.  Step 2 is network with NOTE SELLERS and BUYERS.  But please please do step 1!!!!  Because if you do not, not only will you not be able to get OPM for notes, buyers and sellers will not take you seriously.

These are my thoughts. DM me if you have questions.