lubbock reia - 3 f's of note investing
TRANSCRIPT
3 F’s Of Note InvestingScott Carson’s
Who Is In The Room
• Real estate investor since 2002• Buying and selling NPN’s since 2007• President of Inverse Investments LLC• Creator of Note Buying For Dummies class• The “Love Connection” of ugly paper by Investor’s
Business Daily/Wall Street Journal• 2014 Note Educator of the Year!
Who Is Scott Carson?
• How to FIND NPN’s from banks/hedge funds
• How to FUND these deals with OPM• How to FLIP notes and other Exit Strategies• How To Tap Into Government Pockets• How To Tap Into IRA Investors In Your County
• Create Win-Win-Win Situations for you, the banks, and the home owners!!!
What We Will Cover
What Does Your Biz Look Like?
Investing In Notes…The 411• There Are Over 7 Million Homes Still Underwater Today
• 90% Below $150,000 Values• FHA/HUD Expects to Sell 4X the # of NPN’s Vs REO’s• You Step Directly Into Banks Shoes When Buying NPN’s
• 85% Of Loan Modifications Fail From Banks• Pricing Ranges from 25% to 75% Depending On Market
Why Non Performing Notes• Inventory – 7 Million + Homes Out There• Bigger Discounts – Typical Discount of 50% Greater
• No Headaches – No Toilets Or Tenants Drama• Avoid The Crowds – We See Deals 6-12 Months Ahead of Others
• Systems – Attorneys, Servicers & Vendors Handle Work
• Multiple Exit Strategies – 8 Different Exit Strategies
• Recession Proof? – Low IVT Hedges Against Bubble Bursts
Where To Find These Deals• Banks• Hedge Funds• Servicing Companies• Auction Websites• Mortgage Bankers• Private Sellers
YES and NO! (Don’t bother with Big 5-BOA, Chase, Citi, GMAC, WF)
Hedge funds have pools and pools of notes that they want to move YESTERDAY
Commercial loans versus residential notesBanks are selling SFR, Condos, Townhomes, Apartments, Self
Storage, Hotels, Motels, Mobile Home Parks, Medical, Industrial, Mixed Use, etc!
Deal with smaller, regional banks and some of the smaller lenders SUCH AS….
Are Banks Letting Notes Go?
What Does Junk Look Like?
What Do I Do With These?8 Different Exit Strategies1. Wholesale The Note2. Reinstate The Loan3. Modify The Loan4. Loan Assumption5. Cash Payoff6. Short Sale7. Deed In Lieu/Cash For Keys8. Foreclosure
• What Would Your Pay?• $100,000 FMV Condo• 2/2 1050 sq ft• Fort Lauderdale, FL• Rents for $1200 Month• $165,000 UPB• 24 months in default• 12 months to foreclose• What would you pay for this note?
Money Finds Good Deals
$5,000 in Servicing/Foreclosure FeesNo Repairs NeededWorth $100K+ based on current CMA’s
What Can I Do With This?
PAID $33,000
Small Notes Can Be Found Nationwide As Well$130K 1st lien, no payments for 18 months!$110K ARV (needed $30K in repairs) $55K FMVWhat would you pay for it????
Ugly Notes Need Love Too!
Took deed in lieu from property owner.Listed our REO online.Sold in 30 days for $25,000 to cash buyer!
I never walked property, swung a hammer, collected rent, or showed up to closing!
3 hours of work for us from 1,000 miles away!
$3,750 turns into $17,150
Meet Jamie and Lanny(Taylorsville, NC)
Bought Charlotte Condo NoteUPB was $37.5K, Worth $50KPaid $17,500
Did Loan Mod for owner22% MONTHLY returnSold Asset for $45K
Make Money Holding Note
Modifying The LoanReduce PrincipleReduce Interest RateForgive Past Due PaymentsLoan DefermentSome Down PaymentAdjust Rate
Special Programs To Modify• Hardest Hit Funds• 18 States + DC• State Incentivized Loan Mods• 24 Months of Payments• Some Past & Future Payments• $1,000 Avg Monthly Payments• Home Owner Must Qualify• Lender Must Forgive 25% of UPB
FHA 10-23 Program• After Loan Mod, FHA Refinance Program• Borrower Must have 520 Fico• Borrower Must Make 3 Ledgered Payments• FHA will Refinance 97.5% of FMV of Property• Investor Gets Refinanced Out After 90 Days• Can Combine it With HHF
Who Wants To Make 419% ROI?
• HHF Pays Bank $24K• Bank Has Modified Loan on $60K Property• Borrower Makes 3 Payments ($450 month)• FHA 10-23 Refinances Investor Out After 3 Months at 97.5% FMV
• How Much Did Investor Make?•$24,000 + $1,350 + $58,500= •$83,850 = 419% ROI
The Law Of Averages• If You Buy 10 Notes
• 3-4 Will Modify• 3-4 Will Deed In Lieu• 4-6 Will Be Foreclosures (REO)
• Strategy Should Be To Modify to DIL To Foreclose To REO
800 Clubhouse Dr, West Palm Beach, FL6 Unit Apartment Complex worth $240KBorrower owes $430K (July 2010)
Purchased for $175k.
We sold it 8 months later atFC Auction for $310K!
The Bank Called Me!
2 Week Closing!
WIN FOR THE PROPERTY OWNER!
• Offer Homeowners Deed In Lieu• No Deficiency Judgments• No New Late Pays on Credit• No Foreclosure on Credit• Cash For Keys• No Promissory Notes
How Do We Create Win-Win’s
WIN FOR THE BANKS• They Get Rid of Bad Debt Killing Their Books• Settle in a Fraction of Time• Banks HATE REO’s“Pretend and Extend” Mentality on Commercial
How Do We Create Win-Win’s
WIN FOR US AS INVESTORS
• Very little competition• Awesome deals!!!!• Very little overhead• Close residential and commercial deals• Nationwide Investing• YOU CAN DO THIS WITH NONE OF YOUR OWN MONEY!!!!!
How Do We Create Win-Win’s
Why I Started Teaching
Investors Don’t Know What They Don’t KnowNew Investors Need Someone To CallInvestors Struggle With 3 Things1) Finding Deals2) Marketing3) Raising Money
So What is the Catch???
Fall In Love With Notes This Valentines
Virtual Note Buying For Dummies
• 3 Days Of LIVE Content And Teaching• 1 Day Spent On FINDING Assets• 1 Day Spent On FUNDING Deals• 1 Day Spent On FLIPPING Notes• Delivered Online Via Your Phone, Tablet, or Computer• Recorded For Replay• Ask Questions LIVE• Basecamp Group To Interact With Others
Note Buying For Dummies• Special Guests
• Servicing Companies• Hedge Fund Managers• Loss Mitigation Experts• Experienced Investors• Whole Cast of Characters!
• Friday – Sunday, Feb 12-14th• 9am -5pm
Note Buying For Dummies•3 Day Virtual Workshop•Recordings to Re-Watch•200+ Page Manual•100 IRA Investors•2 for 1 Pricing$599 LubbockREIA Special
February 12-14th
Fall In Love With Notes This Valentines
Past & Military/First Responders
COMPED IN
•www.WeCloseNotes.com•[email protected]•512-585-3810