All Forum Posts by: Rodel Usam

There's entire courses put together that addresses exactly what you're asking..  I think you'll be hard pressed to find someone here that'll give you a free "how to" about it.. there's plenty of options though..  Since it sounds like he's a "motivated seller", it'll all come down to real numbers and full due dilligence.  You could purchase the home on a lease option which allows you to do full renovations to the property with contingencies of course that protects the seller and you.. you could get it under contract and wholesale the deal with all your due dilligence offered to another flipper/rehabber.  I guess it depends on your risk tolerance and your available cash..  If those numbers are right, it sounds like a sweet deal.

If you're new, ask to partner with someone familiar with the Ohio area.. I'm assuming that's where the property is based on your profile info..  In Ohio, I'm pretty sure you'll find a lot of folks wanting that deal if the numbers are correct.  Good luck, hope this helps.

I agree with Marc.. That strategy was even more useful when interest only loans were available so u minimized amortization but the next best thing is the 30 year fixed, especially with the lower rates today.  In my humble opinion..  good luck

Hi Michael,

Sounds like this could be a great deal..  There's many reasons why a person would want to sell a note at a discount.  Most likely their profit is already pocketed and they are willing to lose a little to get lump sum payment upfront, then he/she can move on to the next deal, whereas an investor will have to wait years to be made whole again, then to finally start receiving net profit.  To be certain, you would need to take a good look at the originated note to be sure you can collect the collateral if the borrower/buyer defaults.  Usually without a good pay history, you could get deeper discount.  Then you need to make sure the collateral is indeed worth what the home sold for.  All part of your due diligence when buying notes.  Take your time and ask all the questions you need to and maybe bring in an attorney if you're still not sure, to review the paperwork.

Hi Paul,

Sounds like you're ahead of the curve.  As far as education, Scott Carson, Martin Saenz, Paige Panzarello (Cashflow chick) and Eddie Speed are a few off the top of my head I can think of.  Scott Carson specializes in 1st position Non-performing notes and Martin Saenz is 2nd position Non-performing notes.  Ooh i just remembered Tom Henderson, who teaches partials, http://www.hpnotes.com/.

Here is a course that's online for free by Troy Fullwood but it's fairly old but the main content is still relevant.

https://mortgageinvestorpro.com/module-1/

I'm a note buyer, feel free to send me a tape (list) of notes that you're selling or brokering.  I reply to all messages to me on BP.  I'll send you a message with my email address.

The typical fee for brokers that I've seen is 3% of the "accepted bid" price.  I hope this helps!!  

@Kusha Karvandi - There's a lot of folks willing to "mentor" you in note investing if you're willing to pay their fee. I agree with Bryan that in-person is best but that might be very costly. I would suggest that you start by reading some books. My personal favorites are "Invest in Debt by Jimmy Napier" and "Note Investing Made Easier by Martin Saenz". I would also point you toward other books but those 2 I have read myself. Both of those books give you the basics of Note Investing. Here's a course by Troy Fullwood, https://mortgageinvestorpro.com/module-1/, keep in mind this was a course that Troy charged $20k for about 10 years ago but now it's available online for free. Then, I would suggest you start searching for experienced note companies/investors to JV with, like you mentioned if you have capital ready to invest. You'll need to know what your risk tolerance is and set realistic expectations, like what yield you want to receive based on your exit strategy you're comfortable with. Non-performing 1sts and 2nds have different exits and differ greatly with performing 1sts and 2nds. Finally, if you feel you're knowledgeable enough to understand your investment criteria and risks, then maybe attend a seminar/course if you haven't found a JV deal yet. Facebook has groups you can join where you can network also.

@Adam Johnson - it sounds like you're on the same path as I am.. I would suggest networking with other Note investors and perhaps when you're closer to your funds being available, start looking to JV (joint venture) or like you mentioned a partial. I got my first performing note from another investor that is yielding me 17%. Plenty of equity to cover if the borrow suddenly stops paying too. I'm pretty sure you'll see that you've gotten all the book knowledge you can and it's time to jump in and build your experience, which you'll only learn by doing. From my research/learning, it looks like the best deals you'll get is from non-performing 1sts or 2nds, which is a totally different aspect of this business but if you don't have any experience you could get into trouble, which is why i mentioned JV earlier. JV with another experienced note investor to learn it to be safer but there is still no guarantee. Mitigate your risk and be prepared for the worst. Good luck to you, I hope this helped.

@Amanda G. - Based on your example.

The amortized loan amount would be $63k @9.9% interest for 150 payments.

Loan amount: 63,000.00
Interest/year: 9.90%
Periodic payment: 733.68  (monthly payments you'd receive)
Payment mode: End of period
Number of payments: 150.00
Total of all 150 payments: 110,052.14
Total interest paid: 47,052.14

In this scenario you'd double your initial investment after all payments are made.  Which doesn't include the $7k you would receive in the front end.  I hope this helps.

Here is what the first 12 months of payments look like amortized.  I couldn't post the whole thing.

Loan amount:	63000
Interest/year:	9.90%
Periodic payment:	733.68
Payment mode:	End of period
Number of payments:	150
Total of all 150 payments:	110052.14
Total interest paid:	47052.14
PERIOD	PAYMENT	INTEREST	PRINCIPAL	BALANCE
1	733.68	519.75	213.93	62786.07
2	733.68	517.99	215.69	62570.38
3	733.68	516.21	217.47	62352.91
4	733.68	514.41	219.27	62133.64
5	733.68	512.6	221.08	61912.56
6	733.68	510.78	222.9	61689.66
7	733.68	508.94	224.74	61464.92
8	733.68	507.09	226.59	61238.33
9	733.68	505.22	228.46	61009.87
10	733.68	503.33	230.35	60779.52
11	733.68	501.43	232.25	60547.27
12	733.68	499.51	234.17	60313.1

Hi Tim,

There's a lot more to learn.  I think your best bet is to take a course from reputable names like Scott Carson, Dave Van Horn, Eddie Speed, Martin Saenz, etc.. There's a long list of folks who teach this stuff and there's more you'll learn even after that.  

Just so you're aware, even after taking any of those courses, there's nothing that'll prepare you for your first note purchase because every note is different, ie. amount owed, location, value of asset, sellers asking price, etc.. Don't buy then do research, do research then buy, then do more research.  You'll understand that process soon enough.  I believe there's 9 - 13 different exit strategies so be familiar with them and hopefully master a few.  There's huge difference in asking price between performing and non-performing 1st's and 2nd's (senior or junior liens).  Also some new terminology that you'll become familiar with.  

Good luck and I hope this helped.

Hi Michael,

I don't recall seeing the video you mentioned but it sounds like an example and not an actual case study.  So the numbers are as simple as possible for most people to understand.  You should read "Invest in Debt by Jimmy Napier" which explains the Time Value Money calculator(TVM).  10ii financial calculator is a great app you use from your phone.

This link has a good explanation of how it goes. 

https://www.biggerpockets.com/forums/70/topics/109...

Good luck and I hope this helps.

Here's a couple I know of.

paperstac.com, exchangeloans.com and notesdirect.com

Yes you can buy notes online.  I'm assuming you have no experience buying notes so you should read a few books, Invest in Debt, Note Investing Made Easier and watch all the podcasts from Scott Carson.  Hope this helps, good luck.