Notes We Buy
Types of Property - Think Houses
We are primarily a residential mortgage loan buyer. This means we prefer to buy loans backed by the following types of properties: Single family homes, Condo's, multi-family properties and even some mixed-use loans. Just to throw you off, we also buy land deals. We hope the land can be built on, someday.
Loans Making Payments
We mostly buy loans that are making their payments on time. Interest income is how we prefer to make our money. The majority of what we bid on are current loans. However, if you have a delinquent loan, and it has lots of equity, we may have an interest in looking at it, at the right price. Keep in mind that delinquent notes are heavily discounted, compared to current loans.
Loans with Equity
We love loans that have lots of equity. Equity is King. Whether it is from great cash down payments at time of sale, or because the loan is really well seasoned and the balance has paid down, creating a safe Loan-to-value ratio. As an example of great equity, think of a $300K sales price with $150K cash down. In a nutshell, the more equity, the more we like it & the higher the price we are willing to pay for the loan.
First Liens
We are primarily buyers of first liens. We have found second liens to be much riskier to own & service compared to first liens. We like to stay safe and avoid buying any note that is not a first lien. If you have a second lien with an insane amount of equity behind it, call us and lets talk. Otherwise, please count us out.
Geographic Locations
We buy residential mortgage loans in all 50 states. People need a place to live in every state, so we are happy to buy them in every state. Loans in remote places, like Alaska or Hawaii, can sometimes be challenging, but send it over and we can talk about it.
Types of Loans & Cash Flows
We buy fixed rate loans, adjustable rate loans, loans with balloons, loans with no balloons, monthly pays, quarterly, semi-annual and even Annual pay loans. Just let us know when it pays, and how much, so we can price it right.
Notes We Don't Buy
Most Commercial Loans
Certain commercial properties are a deal killer for us. While this list is not complete, for starters, we do not bid on the following types of properties: Restaurants, churches, day care centers, strip mall shopping centers, auto or marine repair centers, parking garages, manufacturing plants or anything that could remotely have some environmental trouble in the future.
A simple rule of thumb is if the business requires a license to operate or handles any hazardous chemicals, we do not want to buy the loan. We prefer to stick with what we understand, which is to focus on loans secured by properties that people live in.
Simultaneous Closings
We do not buy "simo's." Loans must have made a minimum of 3 months of payments (not out of the closing) for us to bid them.
Really Small Loans or Extra Large Loans
We typically don't buy loans with a balance less than $30 thousand or greater than $1 million. Unless it has lots of equity, in which case you should call us to discuss.
Loans with Little or No Equity
If your loan has little to no equity, we will most likely pass on it. We run away when we hear of loans that are "underwater," meaning the value is less than the balance of the loan. We love equity and we are willing to pay up for it. Equity is safety. If you have loans with great equity and lots of seasoning, you should be able to get a great price.
Mobile Homes
There is no easy way to say it... We just don't love'em. Sorry. From singlewide to doublewide, to manufactured homes, we prefer stick built deals. That being said, if you have a mobile deal with serious land value, and lots of it, lets talk. We might be able to work something out.
