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PERFORMING NOTE OF THE MONTH
PERFORMING CFD
CHOUTEAU, OK
ITV 46% | LTV 50%
VALUE $74,759
UPB $37,881.73
INTEREST RATE 10%
P & I $365.00
SEASONING 122 MONTHS
SOLID PAY HISTORY
REMAINING TERM 238 MONTHS
PURCHASE PRICE $34,092
Additional Assets Available
Contact:
Dave Franecki
Capstone Capital USA, LLC
Dave@CapstoneCapitalUSA.com
www.CapstoneCapitalUSA.com/notevault/
NOTE SEASONING and VERIFIABLE PAYMENTS
When it comes to Note Seasoning…
Note seasoning and verifiable payments make up the two most important factors of Due Diligence. As such, I’ve created this video to help walk you through the ins and outs of good NOTE SEASONING so that you can really capitalize on good investments, and make sure your notes retain maximum value.
Note investing without the right amount of note seasoning is just a recipe for disaster!
It’s our job to make sure that as a buyer, AND as a seller, that you have the right tools for the job. That’s why we’ve dedicated an entire youtube channel just for you!
Note seasoning is simply – how long the buyer has been paying on the note. What does their payment history look like? Is it steady and consistent? Do they have repeated late payments? Is there missing documentation to prove the payments have been made on time? Taking all of these into account will make for a much stronger note buying and selling experience – and will maximize the value of your note! As part of the due diligence on both ends, it’s important as a buyer AND a seller that you know this information.
Are you looking for help with note seasoning? Let us help! Head on over to or contact page and let’s get in touch! I’d love to help speak to you about how we can make your note buying or selling experience a success! CLICK HERE.
SO LET’S GET STARTED. Click the video above for more info on the importance of note seasoning. Note investing doesn’t have to be hard – with the right tools for the job, and the right people on your side, you can ensure that your cake will be baked to perfection! Talk more soon!
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Welcome! We’re so glad you stopped in. Below is a helpful list of resources we hope you find to be most helpful. If you stopped by, please leave a comment below on what your note seasoning process looks like! Don’t forget to like and subscribe to our youtube channel!!!
Dave Franecki EXPERTISE:
Mortgages and creative financing,
deal architecting
rehabbing
building and development
Generating passive income for long term wealth
Real estate deal-making
personal development
IRA expert
high volume REO agent
With over 30 years in the industry – let me help walk you through the oftentimes confusing world of note selling.
IMPORTANT LINKS
Our [NEW] Exclusive Note Vault Group
How to Find a Note Buyer / Note Broker You Can Trust
Selling your mortgage note is not all about or just about price. It is also about working wit a buyer who will follow through and actually close at the agreed price. If you have a note to sell and you are not sure who to call, who to trust or what to look for yo will want to watch this short 9 minute video
AUGUST PHX NOTE INVESTORS FORUM MEETUP
The August 7th Note Investors Forum Meetup focus on:
TOPICS: Several New Case Studies
Where Does a New Note Investor Begin
Bring your questions, This will be an interactive meeting.
The Next Note Investors Forum Meeting will be
Wednesday, August 7th 11:30am-1:30pm
La Famiglia Restaurant, SE corner of Dobson & Guadalupe, Mesa
New to Market – New Performing Notes
Property Locations
IL IN MI OH TN
BPO Range: $33,000 – $70,000
UPB RANGE: $17,785 – $34,860
PURCHASE PRICE RANGE: $19,000 – $26,200
PRICING RANGE: 76% to 90% of UPB
Re-Performing Loans & Seasoned Performing Loans
Click Here to Access
Case Studies ~ Buy A Performing Note – Then It Goes South — Part 3
CASE STUDY 3
This post is a 3rd in a series of 4 regarding how a perfectly good performing note goes south due to life event situation.
This particular note was in the small town of Marshall, IN. The note -Contract for Deed- was originated in 2009. The payors significant other passed in 2010. My IRA purchased the note in 2015. The note was scheduled to mature in June, 2019. I was unaware of the loss of the male payor. The payment history evolved into a rolling 120 days, meaning after 4 months the payor paid the balance or part of the balance to stay out of the forfeiture procedure. However this payment history caught up with the payor in that there was a $5,000 unpaid balance balloon that went beyond the due date of the note.
Fast forward to February, 2019, I was tired of constantly contacting the payor. I did not want to go thru the forfeiture process as to take back the house –due to condition, was not a viable option. Plus 9 months and $3,000 in attorney fees were not viable. In prior conversations, it was discovered she was the caregiver of her mother and was not working. He current husband was not working. After multiple conversations, she realized she needed help. Her Dad was brought into the conversation. He agreed to help her out. They agreed to bring the payments current. In exchange to removing the deceased payors name from the CFD, they agreed to a loan modification which extended the term 12 months, and stay current. If they ran late past 15 days, the newly executed Quit Claim deed would be recorded and my IRA would own the house.
It was a win-win. The payor benefited by having the deceased partner removed from any claim of ownership, the loan was brought current, I avoided the possibility of a 9 month forefeiture procedure and the payor will own her house free and clear in 12 months with the extension of the balloon due date.
Even though the remaining balance was small, the solution was perfect for all.
I have learned, if one works with the payor and developes a dialog, future unfortunate events can be worked out much easier. But, it is all about how can the payor feels and appreciates that they are being helped so they will be open to a solution which also benefits the note holder in the event needed.
This case study was presented at the May 1 Note Investors Forum Meetup
Case Studies ~ Buy A Performing Note – Then It Goes South — Part 2
As discussed in my prior blog, Note workouts are not rocket science. It is a matter of treating every party fairly.
CASE STUDY 2
This 2nd case study happened on a 2nd Mishawaka, IN property. My
partner & I bought a non-performing note(NPN) in October, 2014. The payor had become functionally unable to do anything due to a debilitating disease and had been out of the house for 2 years. We tried a workout which was not viable but did get a deed in lieu of foreclosure with cash for keys.
After fixing the place up, we found a recently divorced lady. She was happy with a probtionary rent-to-own for 12 months a and Seller-carry to follow with 10% down. She was also qualified by an RMLO oer Dodd-Frank. We sold the 1st note to a partial note investor and kept the second.
Fast forward, the payor stopped paying due to illness. Again we developed a good working relationship with her. After a series of discussions, she confirmed that she really did want to stay and agreed to a loan modification. The “we” was the partial note buyer.
The end result is after consulting with our legal counsel and her daughter, the payor signed a Quit Claim deed to be held in escrow and agreed to a payoff schedule for her to get caught up on the back payments. If she falls behind on any payment for more than 15 days we can record the Quit Claim deed. My company will own the house. We have avoided the the foreclosure process to boot. The bottom line: the payor is happy and agreed to bring the loan current, the partial buyer is happy as she is geting paid, my partner is happy as we are both collecting on our second and have avoided a negative situation –the long forfeiture process.. This was/is a total win-win.
Potentially, we may have to record the deed and rehab, but for now it is all good.
Case Studies ~ Buy A Performing Note – Then It Goes South — Part 1
I have been in the note space in various ways since 1985 with the purchase
of 20 acres in Scarborough, ME which was developed into 17 house lots. The last lot I sold with seller-carry.
To that point, in the last 14 months 4 notes have taken a turn for the worst and required developing a work out strategy to protect my interests or if a partial to protect the interests of the partial buyer.
Currently I buy, keep, create partials and broker notes from around the country. Mostly performing notes | Contract for Deeds. Very rarely do I purchase non-performing notes. It just is not my thing. However, notes can and do go bad. The payor has personal issues, etc. Life just happens.
CASE STUDY 1
I purchased a performing note in Mishawaka, IN in 2015. Great #’s great pay history. Good colateral. I found a buyer to fund the purchase via selling a partial and in effect a double close. It was good for them and good for my ROTH. Fast forward to April, 2018, the payors health took a turn for the worst. They called the servicer stating they would not continue paying and were going into a Bankruptcy. My 1st challenge was to keep my partial investor whole. I made up 4 months to the partial buyer, completed a deed in lieu with the payor, rehabbed the house and resold it in February, 2019 at which time the partial buyer was made whole. Throught the process, the partial buyer was in the loop and concurred with the workout and dispostion. They were made whole at the COE. A couple of months later they thanked me stating it was all good especially the net 11% return. To boot my ROTH cleared $20k on a small value asset of < than $70,000. It was a win for everyone. Even on a lower value property.
Note workouts are not rocket science. It is a matter of treating every party fairly.
Where Are the Best Returns on Rentals?
The following article appeared in DSNEWS.
House prices are rising.
There is a shortage of housing.
There is a shortage of rentals.
There is a shortage of well priced notes & REO’s.
“Prices are growing more quickly in some places than in others, and in MSAs where recovery has been most robust (and even in surrounding metros), price growth is probably not the best metric to use for rental investors seeking a new property to buy and hold.
So………….which MSAs have the best rate of return on rental investments?