All Forum Posts by: Darren Eady

Of course there are many Gotchas' that you may or may not find on your first loan.  I would work with an independent title company in your area who will look after your interests, rather than your contractor friend's attorney.  This will be the most important thing you do to not get burned.  And then, as I often say:

You can either become a hard money lender yourself, which requires starting a company, website creation, legal assistance, program creation all to find yourself marketing a product that you have possibly little experience in, and potentially losing money for awhile . . . OR . . . you can work with a hard money lender that has been through all of that, knows what they are doing, and could use your funds to reimburse their loan money disbursed, and see if they will part with their performing mortgage notes. It allows you to BE THE BANK without actually buying the bank! Thanks!

Even if you find lending under $50k, the lender may have a seasoning period requirement before you can use the appraised value vs. the cost to purchase + your rehab costs. The BRRR method works, and I've used it many times, the timing may be a little longer than you may have expected though.

@Bob Malecki

I appreciate your response.  I would imagine many people feel the same way you do as well.  There are many ways to invest, and you and I both sound like we are most comfortable with performing mortgage note investing over tax liens, or non-performing notes.  Keep up the good work!

@Michael Wang I agree with @Jay Hinrichs, I prefer selling performing mortgage notes where you or your IRA purchase the entire note as opposed to a fund where someone is managing your money. For me it is the same as owning a whole property or only a portion of a property. I feel much safer owning the whole investment. There are a few of us on BP offering performing mortgage notes that pay a 12% interest only return. I would suggest finding a particular property that you can do your due diligence on and purchase a note on a property where you know the property and the borrower's situation and are comfortable.

You're right @Eli Kallison, there is much more information on purchasing non-performing notes than performing notes.  I personally think it is because there are so many brokers that make a commission from selling non-performing notes and those of us that deal in performing notes lend our own funds and cannot use a broker to sell our notes (don't really need to) and can't make a public offering so they don't become securities requiring us to have a securities license.  I would be happy to email some due diligence performing note information to you if you would like to PM me.  Thanks Eli!

The note from the seller will be a second mortgage on the property, most likely, so it will need to be paid at the time of a refinance, or subordinated, to remain in second position after a refinance.  Some first mortgage lenders will not allow that second to remain  

@Chris Fennimore

Sorry, forgot to answer with BP profile listed.

This has been my business for the past seven years.  I'd be happy to speak with you but am out playing until August 10th.  There are a couple of ways to go about it, but I imagine I'll save you six months to a year of your life with the looking I've already done and system I've used.  

@Jae Jae

If you are talking about performing note investing, I can assist you.  

If you are asking about non-performing note investing, Scott Carson and Eddie Speed seem to be pros on BP.

These are two completely different markets, so you'll need to specify which product you are hoping to find out more about.

I went to a securities attorney to get started doing what you are hoping to do and there are a few important rules to follow.  On BP, @Don Konipol seems to be a pro with this stuff.  His link isn't coming up on this string, but I'm sure you can find him through a search.  Good luck!