All Forum Posts by: Abby Shemesh

What about your shoe size? Not relevant? 

We @Chad Martinson - short and sweet answer - I would reach out to:

cornerstonesupport.com/debt-collection-licensing-statutes - this is a debt-collection-licensing outfit but am 100% sure they can point you in the right direction if you lob them a call. Other than that, I would also suggest (as @Chris Seveney mentioned), speak to an attorney that specializes in mortgage licensing laws in the states you wish to operate.

@Sam Tright - This is the million dollar question. In order to find low yield investors it will take some DIY elbow-grease whereby you would need to get in there and cultivate and harvest your own SDIRA investor-leads outside of pre-programmed, SDIRA meetups. 

This would require a budget and some patiences in order to bring this goal to fruition thus nurturing this tactic successfully  into existence. 

A strategy we use(d) is targeting self-directed IRA investors and inviting them to a Lunch-and-Learn (at a restaurant venue) to explain the many ways they can take their "lazy-money" sitting in their IRA and putting it to use by investing in whole mortgage loans for a yield that out-performs inflation (6.5% to 8.5%).

Now how does one do this? 

I would start by targeting an area that is close to your location (preferably a city or affluent suburb) where SD-IRA holders would reside.

Once you find your location where the affluent reside (preferably one in your vicinity), I would reach out to a company like Exact Data and buy a list of Self-Directed IRA holders in that target-area with a certain amount of funds in their IRA ($500k, $1MM, etc.).

You would then make contact with the IRA holders (digitally or physically) and invite them to an in-person event like a lunch and learn (at your expense) where you then lay out for them (over free food and sometimes drinks) why they should invest into non-correlated markets like the whole-loan mortgage space.

Of course I am simplifying this but that is the gist. 

The types of services your would need:

1. A service like or similar to Exact Data

2. A service like or similar to Constant Contact or Mail Chimp

3. A service that can assist with mails and physical marketing material

4. Persistence

Your marketing material needs to be a compelling Call-to-Action! Do not cut corners here. 

In real-world case studies, our companies Amerinote Xchange and Amerinote Capital Funding have have tremendous success with this tactic over the past decade. 

The down side I will say that you will find that this may be an ongoing project as you will constantly need to maintain communication and entice private SDIRA holder to continue to participate with your promissory-note-investment syndication, assuming your lead generation on mortgages to buy stay consistent. 

If you are not putting deals in front of your SDIRA folks, the relationship may go stale and you will have to start all over again. 

I hope this is helpful. 

@Chris Seveney We are seeing exactly the same thing with the exception of short-term bridge not making it quite to par (low 90s in low double digit coupon rates). Many of the seller/lenders we are dealing with are still going through the ten stages of grief on the pricing expectations. I find myself having to explain over and over how our debt-money-system works to c-suite executives that have gotten complacent when it comes to subsidized money from the FED over the past 13 years. Nevertheless, we are capturing some valuable trades in the interim. The major hurdle I am running into is being able to place or syndicate on Hotel paper (PL and NPL) as well as NPL ground-up construction loans. Any insight on where to put this loans if they hit our desk would be much appreciated. 

Not sure yet, but I do, I will see you there :)

@Guillermo Perez Vargas - this is not an uncommon request. Some loan servicers  require it while others do not. We have never experienced a servicer losing a note if they hold it in their custody. It all boils down to preference. We typically use Madison Management in which they hold the originals for us. Plus we like Madison because they report to TransUnion which gives the borrower credit stability in the case they wish to refi or the note holder wishes to sell note. This way the note will hold more value. We also like Allied Loan Servicing in WA state because they are very easy to work with and are flexible on the original documents. I hope this is helpful.

@Olutomi Odukoya - You are referring to a hypothecation loan which will allow you to pledge a performing loan or note or portfolio of performing loans or notes as collateral in order to borrower against said mortgage notes. This way you can use leverage to generate capital or expand your footprint into other investment opportunities. 

This is somewhat similar to the same way asset-based lending works. Hypothecation lending is not a cheap loan product, as it is very exotic and no so common. 

As @Don Konipol stated, some banks may offer this type of loan product but you are going to find that there are certain minimums that need to be met, otherwise you will find yourself paying more in points and fees. We are seeing rates ranging in the very high single digits to the low teens depending on your collateral and performance level.

The greater the unpaid principal balance you are pledging, the less points and costs you may see, from our experience. Performing a simple google search (KW - "hypothecation loan company") should show the programs out there. I hope this is helpful. 

@Rami Sobhani

There are several reasons that someone would take on a negative cash flowing property. 

1. You require a tax write off 

2. You will add renovations that will make a positively cash flowing property in the near future (make sure if this is your strategy that you do you market research and do not take the "ready, fire, aim" approach!)

3. You are buying the property way under market value and immediately step into equity that outweighs the negative cash flow (although this is a short term strategy as negative cash flow and all of the headaches that come with it gets old real quick!).

4. You are buying the property on seller-carry terms that are so attractive that the positives outweigh the negatives (this is a rare situation but nevertheless, we see it at least 4 to 5 times a year for sure). This may give you the breathing room and runway to engage in renovations that would increase rents and the value of the property down the road. This is a a narrow strategy and does not work in every market so do your research before diving in. 

I hope this helps. 

@Carleton Ashley - This is a wide open option with regards to the terms and structure. Sky is the limit as the saying goes.

I would add some feedback here though.. I would say that $300k as a down payment on a $1.5MM sale is a good start. I would not recommend going below that threshold. 

Also, I would also say that you do not want to give away the farm on the interest rate either. Try to keep it in line with the overall market (i.e. no 2% rates). 

And last but not least, try, try, try to get a personal guarantee IF (and only if) the borrower is a corporate or trust entity. If they are not a individual borrower with a social security number or a TIN, you want a recourse loan in place and enforceable in the case of default. 

I hope this helps. 

@Chris Seveney this is a solid question. We too have are seeing frustration among lenders looking to exit on NPLs and their response has been the same... Most of the NPL buyers they are speaking to are not professional or communicative, let alone understand the NPL intricacies of the NPL market. 

Truth be told, we share that frustration on the lender side as we see many lenders that are detached from realty and simply do not understand how money works (which blows my mind). 

That being said, we are in the process reviewing a $350MM NPL pool of large commercial assets across the country in which the lender has continually voiced their appreciation of our communication and level of knowledge in the market, compared to others that they claim simply "ghosted them" and left them hanging.

This should be the basic level of service - communication and knowledge. Of course they are a little unrealistic on price but what lenders are not? 

I think a tech platform will come along in the NPL space that will upend the norm and allow all flavors of investors to participate in the NPL market assuming there is enough value provided for the sellers/lenders to allow their assets to be placed on such a platform (unlike paperstac or resitrader). I am referring to a tech-software-driven approach as opposed to a Loan Sale Advisor with a tech component. 

Finance 2.0 will come in and make most of investors obsolete in the very near future unless we get a sturdy footing now and become the willow and not the oak.

As to fade that occurs in deals and trades as you mentioned, I (generally) think this is part of a larger trend we are seeing in this uncertain and inflationary environment. 

We (at AMX) saw very little fade in the days leading up to and entering into the COVID era. From where I am sitting, the choppiness really starting to become consistent after the summer of 2022 with the FOMCs role in quantitive tightening (QT) ramped up. 

But like @Kevin Crowell stated in his post, who can say?

I know I am all over the place in this post, but this is my two cents if anyone gives hoot. 

Thanks for starting this conversation.