All Forum Posts by: Christopher Winkler

Welcome & hope we can learn from each other! I am in the note industry and looking to do more with the physical properties as well.

You need to structure it right, and use a RMLO to comply with Dodd/Frank. You have to  consider the 5 C's of Credit: Character, Credit, Capital, Capacity, Collateral.

You need to pull a credit report and they should have a 600+ credit score, verifiable employment, rent or mortgage payment history, consumer debt payment history, then you have to look at the value of the property. Once you do, and it has 3-6 months of payments, then you can try to sell it on the open market.

We have a Matrix that we use with good guidelines if anyone wants a copy, just pm me.

You did nice work, looks good. Check out comparable rents with https://www.rentometer.com/, so you where you stand, and for clean, nice places, no reason to not be near the top of the gauge for your area...

Its going to be more hassle in judicial states vs non-judicial states. Also, some chatter how its going to be easier in NJ, though I would not hold my breath. Just search for judicial states... One thing is that most do not get to foreclosure, most end up being worked out before the sale @ the steps...

We are about to make an offer on a couple notes that did not include a credit report on the investor who bought a loaded rental. Considering its an important part of evaluating the repayment of the note, and correct me if I am wrong, are we able to pull their credit report as a potential investor before we buy a note? 

Section 604 (a)(3)(E) & (F) of the Fair Credit Reporting Act states:

item subsection “E” says…

Intends to use the information as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation

In addition, subsection “F” says…

Otherwise has a legitimate business need for information in connection with a business transaction that is initiated by the consumer or to review an account to determine whether the consumer continues to meet the terms of the account.

The full document can be found here; http://www.consumer.ftc.gov/sites/default/files/ar...

Does anyone have any instances they could not or should not do this? All replies & comments are appreciated!

Don't forget to find out the status of the 1st, if they are paying it or not, or if the 1st has filed a notice of default. Also see if they are filing or have filed for bankruptcy.

Also, please correct me if I am wrong, I am under the impression it is possible to pull their credit report as a potential investor. Section 604 (a)(3)(E) & (F) of the Fair Credit Reporting Act allows this for a potential investor:

item subsection “E” says…

Intends to use the information as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation

In addition, subsection “F” says…

Otherwise has a legitimate business need for information in connection with a business transaction that is initiated by the consumer or to review an account to determine whether the consumer continues to meet the terms of the account.

The full document can be found here; http://www.consumer.ftc.gov/sites/default/files/articles/pdf/pdf-0111-fair-credit-reporting-act.pdf

You can always try to sell it to a new owner with seller financing IF they can't get a loan on their own. Try to get 10% or more down, ideally 20%, so you know someone has skin in the game. You would want over a 600 credit score with good job and payment history on their apartment & such. Since they never vetted you on the purchase (?), then they would not be vetting the new owner.

You would need a RMLO to originate the note, and after a few months of "seasoning" you can sell it on the open market to recoup the rest. I can send you a seller finance matrix we have on tips to help structure it for maximum resale value if you PM me. Good luck no matter which way you go...

 Great info for me Mike, and appreciate you taking a few to reply. What is it about NC that is a turn-off for you? 

 Agreed Wayne, however, it lets you deal with RE that you might not be able to deal with. Best to you.
Chris

 Thanks Hattie, I am looking forward to being a Texan!