All Forum Posts by: Steve Burt
Steve Burt has started 20 posts and replied 63 times.
Post: Good Site For Purchasing Notes
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
Originally posted by @Bill Gulley:
You can search deeds of trust, (mortgages) the named grantee will tell you if it's an institution or an individual or small LLC type. You'll get more frustrated note holders looking back 12 to 36 months ago, not at new notes as that is simply lending without seasoning. There can also be some issues buying new notes at settlement or thereafter as you may still be "funding at the table" which is a lending function, not a note investing matter.
Brokers can be dumping institutional trash, individual note holders sell because they need the money usually, complete different motivation and motivation is an underlying factor of the discount. :)
If you go the courthouse search route, you are basically going a cold call route right? You just see if an individual or LLC is willing to sell after you hunt down their contact information? Would information on whether or not it is performing also be included there?
Post: 2nd Lien Non Performing Notes and Bankruptcy
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
I included a link in the bottom that I based my reply off of. In a chapter 7, it is possible that the 2nd lien was stripped correct? My understanding is that if it is stripped then you would not have the ability to foreclose. Either way, would it be most prudent to look up their bankruptcy case, and then see if they had filed a 'motion to avoid' their lien?
As a sidenote, I recently saw a Chapter 7 file where a motion to avoid the 1st position mortgage appeared to be successfully passed because the mortgage company did not challenge it. This would mean that the borrower no longer has to pay the loan, but the company could still foreclose, correct?
Post: How to find Notes worth investing in!
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
This thread has been fascinating, but there were a couple of scenarios outlined that I have not been able to make much sense of. Could anyone elaborate on these?
Post: Adverse Selection
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
When sourcing notes, how do investors account for adverse selection? Surely no bank would sell a note that they feel they could internally refinance or cure.
Post: Learning
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
Originally posted by @Bill B.:
Hi @Steve Burt
After you identify the servicing company (there are several) contact them and let them know you are preparing to invest in notes.
You can find them by searching "real estate loan servicing companies". I won't recommend one over another as your needs may be far different than mine, AND I'm new enough that I'm still learning, too. And, as always, due diligence, due diligence, due diligence before establishing the relationship.
They will forward an agreement that spells out their services and the fees for those services. After you execute the agreement, they establish an account for you. This is not a difficult process, but it can take several days and you don't want to have to find the vendor and establish the account when a note seller is expecting you to close the purchase.
I learned the hard way that it is important to have this set up before purchasing the note.
Importantly, you should not incur any fees until they start servicing notes for you.
I hope this helps.
Wonderfully helpful. Thanks!
Post: Learning
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
Originally posted by @Bill B.:
Learning by doing is the ONLY way to learn....with some very important caveats. There are a LOT of federal and state laws and regulations governing notes. It is critically important that you have a servicing company on board BEFORE you purchase the note. On your first several notes I would also strongly advise that YOU NOT contact the borrower directly as it is far too easy to violate rules established by Dodd-Frank and the Consumer Finance Protection Bureau.
If all goes well, you are OK. If not, you can find yourself in violation of federal laws. This is NOT meant to scare you away. Just learn the ropes with people who know where the mines are laid. That means a reputable servicing company and a mentor from your local REIC.
I'd also add Watermark Exchange as another site to get familiar with notes.
I hope this helps.
Bill
How do you get a servicer on board before you buy the note?
Post: Auction.com
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
Had a couple of questions about Auction.com, I have been browsing it for a couple of months, making inquiries here and there.
On Properties: It seems like or a lot of properties you are buying them site unseen. I have even made an inquiry about rent rolls and been told they're unavailable. I was wondering if people have had similar experiences and how did you bid without being able to inspect the property or see financial statements? I have read a couple of posts on here where people will win a bid then off the tenants cash to move out. What is the logic there? Unless the tenants are not paying or the rent is severely underpriced?
On Notes: I have seen a couple of note auctions as well for MF and Commercial property. One that strikes me route now has tenants that are current, but somehow the Note is in receivership. Do people who purchase these notes hope to foreclose or refinance?
Originally posted by @Franklin Romine:
@Mitchell Jaworski a couple of the properties i bought at auction.com said occupied. After i closed on them and i started pounding on windows and doors... No one or belongings were there. So, that was good. A couple other properties i bought tenants were onsite and i offered cash for keys. I typically offer $500 to move out. Which worked well in 2009, but now it seems like the dam occupants are getting greedy... You could be looking at $1000. Also, i never show up puffing my chest out that im the new owner. I'm just a messanger man doing the dirty work for my boss... Aka warden aka wife.
Frank
Hey Frank, why did you want them out? I assume they were paying rent?
Post: Requesting further Info from RE Agents and owners
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
Hi all, in about 6-8mos time, I will be investing in my first property. Likely a small SFR for my brother to live in while at college just to get a feel for the buying and PM process. That being said, I will have the capital to potentially acquire something larger. It would be tremendously valuable to me if I were able to contact realtors now get some info on properties (income statement, rent roll etc) and then analyze them. I would then be able to see what they sold for and get some practice in before gearing up for the real thing. My question is would Real Estate agents be willing to allow me to sign an NDA and get these docs? I don't want to indicate buying interest because as of now that is not likely and I of course value their time.
Post: Financing with <20% down
- Consulting
- Fort Worth, TX
- Posts 65
- Votes 15
I do not own a primary residence currently. I would be looking to purchase a 4 -plex or a complex in the 16 unit range if I could get a higher LTV.