by Gordon Moss
What is THE most unique and abundant opportunity in our real estate
and note investment market today? I believe it is the
non-performing note (or non-performing real estate note).
Banks today are saddled with a tremendous glut of defaulted and
under-performing real estate paper. Contrary to the belief of
some, banks are not in the “bad debt” business. They also don’t
have a strong desire to foreclose or favor holding a large
portfolio of REO (Real Estate Owned) assets. They are in the
lending business, not the non-performing real estate note business.
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Gordon Moss is one of many experts who will teach at the Paper Source
seminar “Profits In Non-Performing Notes” Nov. 20-22 in Las Vegas.
For info and to register, visit
http://papersourceseminars.com/non-performing-notes-seminar-2014/
or call 800-542-2270.
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Do you think it is possible that a banker with a non-performing
note might want to sell you the note at a substantial discount to
achieve his goals — which might be to get this asset off the books,
comply with regulators’ requirements, and regain the ability to
make new loans? The answer is YES.
What does it take to become a non-performing note buyer?
Bankers do not have the time or desire to educate you. They must
believe that you have the knowledge, experience and resources to
effectively solve their problems.
When dealing with these bank assets you will not be talking with
the president of the bank, but usually a mid to lower level asset
manager whose main focus is most likely to be his or her own job
security in our current, turbulent banking environment. If you can
develop trusted relationships with these bank managers that have
the types of assets you desire with the need to liquidate — and you
can prove that you can solve their problems through buying the
unwanted assets — than the next several years can be a great
opportunity to make large profits buying defaulted notes.
* Start by learning the rules of the game of buying real estate
notes. You must master the language and process of buying
distressed notes to gain the credibility you will need to buy real
estate notes successfully.
* You need to decide what type of collateral/product/location you
see as the best fit for your investment strategy.
For example, we have focused on the Western United States, trust
deed states, and only good quality single family houses as our
collateral. Our group has a strong background in buying real
estate notes on commercial properties and will build that part of
our acquisition business moving forward — but you must develop a
plan to buy real estate notes that works best for YOUR note buying
objectives.
* Then it is time to hunt for the note sources.
Our current environment is littered with all types and flavors of
note brokers. Very few of these note brokers will prove to be
profitable relationships for you. Most of them are “chasing their
tail” trying to sell you undesirable note paper that they have no
control over and at high prices.
* Learn the current market. That is KEY to making profitable
note buying decisions.
Look at as many notes as you can get your hands on. You will then
get a feel for pricing and quality of the product that you are
focusing on. After looking at a few thousand notes from many
different note sellers you will have a sense for a bargain when you
see it.
* Once the note is acquired you must follow the correct procedures
for the assignments, RESPA and TILA regulations, recordings,
boarding the notes with a servicer, securing the note in a vault,
and then finally develop an asset management re-performance or
liquidation exit strategy that fits the note paper and the
opportunity.
* Exit strategies in buying real estate notes are the real art of
this business, and the way they are handled will determine your
level of success. A short list of these include:
— Resale of the note (getting cash for notes you have purchased)
— Loan Modification/Forbearance Plan
— Short sale of the property
— Cash for keys
— Deed in lieu of foreclosure
— Foreclosure
To be continued…
Gordon Moss is the #1 expert in investing in SECOND position
non-performing notes.
He began his career in real estate in 1985 as a commercial
real estate broker in Orange County California. He has been an avid
student of the masters of all facets of the real estate and
investing business for over 25 years. He now owns and manages a
portfolio of properties and notes full time and today is very
passionate and active in what he believes is the best real estate
and note investment opportunity we will see in our lifetimes.
These 25 years of experience and focus give him an exceptional
perspective.
Gordon’s new book, “Performance Anxiety:
Creating A Fortune Investing In Non-Performing Real Estate Loans
is available at http://tinyurl.com/ldz7m8h
He and other experts in non-performing notes will teach a one-of-a-kind
seminar Nov. 20-22 in Las Vegas. Visit
http://papersourceseminars.com/non-performing-notes-seminar-2014 or call
1-800-542-2270. Super early-bird discount registration expires Sunday,
Aug. 31.
