All Forum Posts by: Cody Cox

Coming from the perspective of a note investor that frequently uses joint venture funding from a passive investor that accesses their IRA to fund a note acquisition, I have preferred when the funds come from a checkbook IRA. In a note transaction, the funding aspect happens very quickly. Once a Note Purchase Agreement is signed, the note seller typically wants funding in 24-48 hours. With a checkbook IRA, those funds can be quickly wired, whereas my experience when the custodian holds the funds, that turn time is longer and can impact the note deal.

Echo what @Adam Adams says. Every time I've used a national firm I'm disappointed.

Reg Z, TILA and RESPA are pertinent for owner-occupied loans.

The three primary factors in your due diligence is Title, Taxes and Value. If you can nail down those three, and are able to acquire the note at a reasonable discount, then the success of note buying is acheivable. Obviously, there are many other mechanics involved, but those three are the high level keys.

I would suggest you talk with Patty Bolstad with HomeSmart in Salem. She has been in the local market for awhile, and knows real estate investing. She is who I call when a promissory note comes available in Salem.

http://pattybolstad.com/

@Dave Blackman The promissory note is the document that creates the obligation for the borrower to repay. That is the agreement between the borrower and the lender. The lender may choose to sell that note to another lender. With that sale, the original lender must endorse the note over to the new lender. That endorsement is either in the form of a stamp on the note itself, if there is adequate space, signed by an authorized signer of the original lender. Or, they can create an new document with serves the same purpose. That document is called an allonge, which is French for "to draw out". Like endorsing a check, it "draws out" the funds from one account into another.

I do agree wholeheartedly with @Varinder Kumar. Have a basic knowledge at what a collateral file should contain, but have your attorney sort through the file to assure it's complete. If not, the attorney should be able to find what is missing, what is a legitimate document, and how to locate what items may be missing.

What I need in a collateral file is the ORIGINAL Promissory Note and Mortgage/Deed of Trust. Plus, all the prior executed ORIGINAL Allonges/Note Endorsements that correspond with each Assignment of Mortgage, again, the ORIGINAL recorded copy. You need to be sure they match to assure your ownership in the chain of title. Additionally, I want the ORIGINAL Title Insurance Policy.

Hope this helps.

I had to go a completely different route, partly because of what you describe above, but mainly because I have a full-time day job that restricted actively marketing for real estate. I chose to invest in non-performing promissory notes secured by real estate in various targeted spots across the country. This is a b2b business that allows me to hold my full time job and invest nationally, with the only requirement of having a quality internet access. Plus, I can purchase assets at better pricing than real estate, and there is plenty of assets.

I signed and am actively using Pipedrive, thanks to a fellow note investor, Adam Adams. This allows me to coordinate all my note activities in one location. I still need to work the integrations with Automate.io to add in the popup checklist, with is a very cool feature, but having a full-time day job with a limited window during the evening for my note activities, Pipeline allows me to stay organized. One big feature of Pipedrive that not other CRM/Project Management tool has unless you upgrade to the expensive Salesforce, it allows you to match your emails to your deals. Having that one feature easily makes the $25/month cost well worth it. If you make the decision to subscribe to Pipedrive, adding the promo-code AF-AJACRM will add another free 30-days to your "trial period". I do not receive any compensation for you using that promo-code. (Adam might get some additional free time, but no direct monetary compensation.

When I look at various states of which to purchase non-performing notes, in addition to judicial vs. non-judicial, I also look at length of process time, if the state has redemption rights back to the borrower, and the length that borrower has to exercise their redemption rights, costs of foreclosure, whether the state participates in Hardest Hit Funds, and where the state requires any special debt collectors registration. 

You can look at HHF funds at the US Treasury HHF website. Also, RealtyTrac.com and MadisonManagment.com have listed charts that show times, judicial vs. non-judicial, redemption rights and time period.

Should you be a newer note investor, I would suggest you target 3 - 4 states when you start out. Then expand as you gain more experience. You also will need to develop a "team" in your target markets: attorneys, real estate agents, etc.