I have a confession to make. One of the most frustrating parts of note investing is FINDING the notes.
Why do you think investors, big and small, work with brokers and referral sources?
Investors want to INVEST in real estate notes…not spend their time looking for notes.
I know I’m not alone in this feeling. I get calls and emails all the time asking…
Where Do I Find Notes To Buy?
Performing and Non-performing notes are primarily bought at a discount from one of three places:
- Private parties that seller finance
- Banks selling scratch and dent loans or non-performing notes
- Hedge funds buying in bulk then liquidating smaller pools or individual notes
It takes marketing to cultivate these sources. And marketing takes time, dollars, or connections. Sometimes all three!
Before I reveal a revolutionary new shortcut for investors, let me go over a bit of history.
Sourcing Real Estate Notes
There are five main ways to market to “mom and pop” seller financed note holders. Some take more of your time (referrals, online, building your brand) while others require greater capital (direct mail and ads).
Non-performing notes (NPNs) are usually sold off by banks in large portfolios, which are gobbled up by the big hedge funds. Unless you have substantial funds or connections with asset managers, it can be tough for the private investor to get a foot in the door.
These wholesale methods are great if you have the time or dollars to build your marketing machine, but what about the passive or part-time investor? Someone that wants the high returns and security of real estate notes but just doesn’t have the time to pursue wholesale strategies.
Wouldn’t it be great if there were an Amazon for Real Estate Notes?
A virtual retail store where you could search for notes, select the ones you like, view the collateral doc history, and purchase with no haggle pricing?
That’s exactly what the NotesDirect.com listing and trading platform provides!
The NotesDirect.com Solution
I had the opportunity to test drive the note investing platform and let me say… I was impressed. In fact I was so excited about the project I decided to collaborate with the NotesDirect team in a consulting role. It’s a game changer that makes it easier for private investors to find and buy notes and I want to be part of it.
The NotesDirect platform provides a retail solution to the challenges that we all face in the note business. I’m guessing you’ve encountered or even made a few of these statements yourself…
Problem: I just don’t have the time to market for notes.
Solution: NotesDirect.com provides notes on demand. Choose from hundreds of cash flows in a non-auction format. Search by State, Balance, Interest Rate, Asset Type (Performing, Non-Performing, REO) and more! Think MLS for real estate notes.
Problem: I’m looking for investment income, not a second job.
Solution: The listings on NotesDirect are ready for purchase with no haggle pricing. Answering calls from sellers, negotiating pricing, and collecting documents take time. Time you don’t have if you are busy in another career and are looking for investment income, not a second job. With this online platform you can focus on building your portfolio.
Problem: Chasing down paperwork is a major hassle.
Solution: Download a full collateral file upfront with just a click of the mouse. If the devil is in the details then purgatory is gathering all the documents. The ability to view the note, recorded documents, prior title, recent BPO, and a payment history UPFRONT is a note buyer’s version of heaven.
Problem: I want to own and control the note, not invest in a fund.
Solution: You are purchasing the note directly from the seller (no middleman). A third-party prepares the transfer documents, and you (or your retirement account, trust, etc.) take title and possession of the note upon funding. You also select your own servicing agent. This keeps you in control, ensures compliance, saves you time, and makes sure the payer doesn’t miss a beat on where to send payments.
Who Is NotesDirect For?
The platform was created for private investors with access to their own funds that are ready to take action. An investor needs to be prepared to review a transaction and verify details before funding. You have ten days after placing the offer to perform your due diligence before closing.
It is not for brokers wanting to place notes with institutional investors. While brokers are an important part of the note buying process, they would want to source their own deals using wholesale methods.
What Does Access To Note Listings Cost?
I saved the best part for last… NotesDirect retail access is free! If you decide to purchase a note after due diligence, there is a $750 transaction fee that is only collected at closing for completed deals.
Here is how you can start browsing notes for sale:
- Visit NotesDirect.com to register online.
- Login with the credentials you receive upon approval.
- Start searching for notes
I hope you’ll join me as we work to make NotesDirect.com the #1 online trading platform for investing in discounted real estate notes!