All Forum Posts by: Jeff James

@Patrick Desjardins, if notes with a borrower that does not match the current property owner or a second on a property $200k under water, the first lien holder has started foreclosure, and the borrower has filed for bankruptcy protection is the perfect note then you are right I am not going to pull the trigger and note investing is obviously not for me.

Send me the information associated with one of your notes so we can see if I am one of the investors that has infuriated you lately.  Maybe I am and have no business investing in notes.  If that is the case I apologize in advance for raising your blood pressure and wasting your time.  I would rather know that notes are not for me than continuing wasting my time and the time of others.

@Craig Garrow, I primarily invest in certificates for the interest income.  I am a new investor and none of the liens that I have purchased have been redeemed to date.  Therefore, I have not received any checks yet.  The liens that I have bought are over the counter certificates in Florida so they are earning 18%.  If you go through other threads on BP you will find that some people advise against buying OTCs while others at least say they buy them.  I recognize that they are higher risk/less desirable than the certificates acquired at auction but I believe I took steps to mitigate the risks somewhat.  We shall see.  My crystal ball is in the shop.  Anyway I cannot make a tax deed application until a certificate is two years old and they don't expire until seven years from the date they were prepared so for the time being it is wait and see what happens.

I am an investor who is looking to buy my first note.  I am new.  I don't pretend to know all of the answers.  I am still in the "I don't know what I don't know" phase in many ways.

Because I have no experience and I don't have a hedge fund budget, I understand that I am not going to have note holders come running to me.  By the time the notes make it down to a level that they are available to me all of the obvious prime investment opportunities are going to be gone.  I get that.

I have been going to several of the usual websites where notes are available.  Even with my low expectations I have been disappointed with what I have found.  For example I have found more than one site with multiple notes that predate the most recent transfer of the property--the borrower and the property owner do not match and in some cases the borrower has not owned the property for a couple of years.  Is it possible that the new owner has acquired the property subject to the existing note?  I have never participated in that type of deal so I don't know how to recognize when that is the case--I just make it a policy to pass on those notes.  I have found some sites provide considerable due diligence type information and others treat it like a national security secret.  Sometimes the due diligence information provided is worthless because it is two years old by the time I get it or it is so full of errors that you cannot trust anything that is included.  I found that the information was inaccurate when doing my own due diligence.  I understand that the ultimate go/no go decision is mine alone so I perform checks on the info provided.

Believe it or not, I did not make this post to whine.  I hope that it doesn't come across that way.  If it does, it was not my intent and I apologize.  I don't expect anything to be handed to me.  I realize that I have to work for my results--good and bad.  My main purpose for this post was to discover whether what I am finding is typical and I need to reassess notes as an investment strategy or if my experience is merely the result of where I have been looking and with proper guidance I could find that notes are a good investment vehicle.  I can live with either scenario.

Thanks in advance for your time and consideration.

I will reply but I doubt I will be of much help.

Every state has different statutes regarding how certificates are created, acquired, effective periods, minimum certificate age required to apply for a tax deed, certificate expiration age, etc.

I recommend that you post what states you are interested in purchasing certificates and hopefully individuals who have acquired certificates in these states will respond.

Your strategies will dictate your operating costs.  Are you just looking to hold the certificates for the ultimate interest income or do you want to use the certificate as a means to acquire the property?  If you want interest income there are usually very little, if any costs involved after acquiring the certificate.  The pitfall with this strategy is that the money is tied up until the property owner redeems.  In the states with which I am familiar there are no payments to the certificate holder until it is redeemed.  If you want to acquire the property associated with the certificate there will likely be administrative costs associated with the tax deed application and in at least one state with which I am familiar (Florida) it is possible that significant other costs could be incurred but that process is only important if you elect to invest there.

Another pitfall in tax lien investing is that in most, if not all states the certificate expires after a specified duration.  If no tax deed application is submitted prior to expiration of the certificate the holder loses his/her/its entire investment.

I will wait to see in which states you are interested in investing and if I know about the process in them I will try to answer any question you may have. 

@Roma Korenyuk, thank you for the recommendations.

@Darren Eady, thank you for the recommendation.

@Les Goss, I will send you a private message with the details.

@Roland Thomas, thanks for the recommendation.  I will check them out.

I need recommendations for a note servicing company.  I have been having problems with the one that I am currently interacting with and when I complained the President/CEO sent an e-mail blaming me for the problem.  Any help would be much appreciated.  I am tired of getting poor service from providers to whom I am paying good money.  Thanks.

@Sterling White, please forward me details regarding your meetup group.  I am interested.

Thanks.