All Forum Posts by: Logan Hassinger

Martin brings a wealth of knowledge to the table. Many should get a lot out of this. 

@Jarrod Pettit

I disagree with you that you need to increase the returns to attract more capital.

A few others have already touched on this but raising capital is about relationships. While the deal is important, and your investors should be able to perform their own underwriting to validate your assumptions, the operator is by far the number one risk. 

Sure, the current environment presents challenges but your ability to communicate your objective, strategy and overall thoughts on the situation should be able to attract the right capital. Not all capital is equal as I’m sure you’ve seen. 

The Operator and Limited Partner/Investor/Lender (yes they are all different) relationship is the most important piece in all of this. I’m on both sides of the table as I invest passively in apartment syndications and raise capital for my performing and nonperforming note business. In both instances, communicating clear expectations, overall underwriting style and being seen as the expert in your area of concentration is what proves to attract capital in all market cycles. 

Good luck to you in this new economy we live in. 

@Bob Malecki completely agree. Unprecedented times. 

@Dan Deppen

On most, it’s 10-15% less so far. 

@Bradley Ritter

I know that I just received multiple tapes today from sellers that want out. To be frank, I’m surprised it happen this quick. 

@Izraul Hidashi
 
I’m not claiming to know how the entire banking system works but I feel that I have a pretty good idea.

A home loan is made via the note with a Mortgage/DOT (depending on state) attached as the security instrument, which allows the home to serve as collateral if the note is not upheld.

@Zachariah Prevost You stated that when a bank goes to sell the home loan to Fannie/Freddie or any other willing buyer for that matter, that they are stripping away the Mortgage/DOT from the note. In my limited thinking as a note investor, I’m not sure why that would be happening.

Here’s why I say that. I know that when I’m buying a loan, I’m buying the future payments at some price. However if those payments are not made and the loan falls in to default, my security is knowing that I have collateral in the home and it’s value. 

What I don't understand, and help me on this, is why someone would simply want to purchase the Mortgage/DOT without the note.

I'm aware that thousands of notes with their corresponding Mortgages/DOT's are packaged up and as a whole create an MBS (mortgage backed security). The seller receiving cash to reinvest or lend and the buyer to receive the payments on the thousands of loans within the MBS.

I’m definitely an active note investor and run this like a business. It involves marketing for new sources, investor relations, asset management, and then all over again. 

I do enjoy it though. 

That’s right @Chris Seveney, many of us are in the note business to keep a borrower in their home. I know that’s my primary goal and first option we present them with.

If things continue like they are, then yes, going to be some time before small time note investors are there picking up inventory. I know for me, I’m already seeing a pickup in responses to my bank direct marketing.

Looking at a small pool of scratch and dents and buy backs today. As the markets, both RE and stock, become more and more scrutinized, sellers will begin to move loans that they were once willing to sit on. 

At a macro level and In terms of increased inventory for NPN's, borrowers are going to have to burn through 3-6 months worth of reserves then another 4 months of delinquency for a bank to take action. I think it's going to be at least till the Spring/Summer of 2021 before we see meaningful increases in defaults.

To @Bob Malecki point, the recession or at least a downturn has already begun. 

When you start analyzing MSA’s, and sub markets of course these will be different across the nation, which is why focusing on certain markets will be key. 
 

@Jack Everett McMichael

Much easier to have the conversation over the phone lol.

DM me if you would like to set something up