How to Buy Real Estate Notes, A Personal Experience
Look at this – A note broker friend and I had a conversation about a 23-note pool made up of 1st and 2nd mortgages, all nonperforming loans. It was a $3 million dollar pool.
I review all the loan documents and submit a bid to buy the real estate notes the day, and I find out the day after that I had won the bid with a $1.1M offer.
Yes I know what’s running through your mind “dean, I don’t have that kind of money, maybe this isnt’t the right business for me. I can only afford $20,000…”
The bid that I submitted was for 6 non-performing notes out of the pool. Based on those 6 notes, the seller advised me that I was put on a short list.
Could you have bid 2 of those real estate notes for say $50,000 a piece? Sure.
The Point I’m Making On Real Estate Note Buying
Most times you won’t know in advance whether you’re allowed to bid on a small chunk of the pool, so just make an offer anyway.
Anyways, back to the story…
And one day later I received another opportunity to bid on a real estate note pool. The non peforming note pool was priced at $8 million and the bank told me that they had another one they would be sending out in the future. I bet I will probably be able to cherry pick the notes I want out of these pools as well.
Ahhh… you see why I like note buying?
Instead of having to run after all your real estate note investment deals, (buying/finding properties) you can build one relationship that keeps generating more business.
How to Find Real Estate Notes – Key Point
When your closing deals in the note buying business, be dependable. Close when you say you will and pay the price that you bid…a lot of investors will think about you when they have a future note buying deal. Track records count.
This is great way to get your note buying business started and build up your pipeline. The small amount of Real Estate Investors that understrand how to buy real estate notes can become very successful, and that’s what makes the non performing note business interesting.
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