All Forum Posts by: Alecia Bolton

Got it.  I was thinking you were the mortgagee and that was where I was confused.  You'll end up selling it in a couple months after you rehab it?  And your family doesn't want to wait for you to cash them out?  Or, you want to buy it from them with hard money and have them cashed out?

An RMLO is necessary for creating an owner-occupied note.  It covers licensing and makes sure you're qualifying the buyer per Dodd-Frank rules.  It also increases the value of the note.  

Generally, you want it to be seasoned at a minimum of 6 months, better for a year.

As a note investor, I would look at it a couple ways.  If you are planning on paying off the note when you sell the house after rehab (so in a year or less), and I knew that, I'd be willing to buy it at maybe $65k (8% discount).  If I didn't have that information and all I knew is that I was going to go to the term of the note, the discount would need to be closer to 20-25% discount.

@Jack Smith

Is it a mortgage or a contract for deed?  How seasoned would the note be when you try to sell?

Most note investors wouldn't buy a performing note without a yield of 7-8%+, which means you'll have to offer a discount on this note.  

If this is a property you're buying and getting seller financing on, good job.  Stay with the low interest rate.  Would the note holders be looking to sell it?  Are you trying to facilitate that for them?

If you are getting seller financing, make sure you include in the contract that you have first right of refusal to purchase the note if the note holders try to sell.  That way, if they decide to sell, you can potentially buy your own note at a discount.

All you said is true.  I would agree with what Chris said above on the vacation rental advice.  So many folks are struggling because of the travel industry.  You obviously know your market, but I'd be very conservative.

As far as originating.  If you're planning on doing more than one, I'd use an RMLO to do the origination.  That way, you'll stay in line with all the regulations.  

Note Investing Tools just put out a class on this.  I've bought it, but haven't started it yet.  I have taken some of their other classes and they are good.  I'm not affiliated at all.  Here's the link.   https://www.noteinvestingtools.com/store/FF2HkYR7

I created a note on a piece of vacant land.  Didn't use RMLO.  Sold it to the neighbor and so didn't feel the need to do all the due diligence.  If I get it back, then I'll just create a new note or sell it outright.  So my risk is pretty low.  And I do love the monthly income.

@Chris Seveney - do you ever create new notes when you take back a property after foreclosure/deed in lieu?

@John Underwood  That's not quite what I meant.  The tax deed itself doesn't change, but the title is certified so that when you sell it to the next person, the title company is willing to issue the warranty deed with title insurance.  In WA, if you try to sell a property you purchased via tax deed, no title company with issue title insurance/warranty deed within 3 years because of the redemption period.  They will if you get the title certified by this company.

@John Underwood Tax Title Services doesn't provide insurance.  It is a company basically researches the title and provides a report to the title company to certify that the title is clean so the title company can issue title insurance and a warranty deed (what type of warranty deed is state dependent).

You should first talk to a title company to see if you can get title insurance on a tax deed, in the event that whoever buys it wants a warranty deed rather than a QCD.  In WA, title companies won't deal with tax deeds unless you pay to have a service do title research and certify the title.  That company is called 'Tax Title Services' and certifying tax deeds is what they do.

Good luck!  

Welcome to the note world.  I third the biggerpockets reference.  That's how I got started.  I've linked some of the threads that have a great list of resources.

https://www.biggerpockets.com/forums/70/topics/335218-note-buying-education

https://www.biggerpockets.com/forums/70/topics/741690-note-investing-mentoring

I also recommend the following podcasts that have a lot of basic info that they build on as the seasons go on.

• Note Inc
• Naked Notes

@Antonio C.

I haven't used Paperstac, but I've heard good things (the founder/developer is a member of BP).  

NotesDirect is great in that the collateral files are there for you to review, so you can practice reading through them.  The downside with them is that the price is the price.  I have not purchased from them, but do have access to the site.

Those are the only 2 main sites I know about. I get my notes primarily through the Note Assistance Program, which is also where I got some of my training. They have a podcast called Naked Notes which has a lot of valuable info. But they have an exclusive trade desk and to get access, you either have to join or JV with someone already in the community. Happy to talk further about the program or JV'ing if you're interested.

You want to go with a servicing company.  They will keep records, send out the 1098 at the end of the year, and can help deal with the owner if something starts to go awry.  They run about $20/month for a performing note.  There are several out there and I've named a few.  There are pros and cons about each of them.  

Allied Servicing

Madison

REPS

Too much due diligence? Is that even possible?