Note Investing

Good morning everybody, Chris Seveney on my morning drive a littleearlier this morning. Had to drop the car off for service and it is damn cold here in DC. So waiting for the car to defrost. I want to do a quick video on a bidding in note investing. And one thing I see some investors missing the boat on is what is the principle and interest payment.

Remember you’re going to pay 20 to $35 per month in servicing if you’ve got an escrow being held as well. And I’ve seen some people recently bidding a high numbers, you know, 20 slash 15, $20,000 for assets that have a principal and interest payment of $150. And when you look at it, you’re basically netting about 100, 125 bucks a month. And over a course of a year you’re making 14, 1500 bucks. That’s 10 years. Get your money back. It’s not really a great return by any means.

Bidding

I just want to be cognizant of people. You can’t always just go by the 80 percent rule of, you know, paying 80 percent if it’s performing notes, um, on the nonperforming or performing, it’s one thing to take into consideration because even if someone’s behind a year and the payments that low, now they can reinstate that loan for 12, 1500 bucks and then you’re stuck with those little payments and when you go try and sell it.

Remember people looking for a certain yield and to get to 12 percent yield on a number like that, uh, your numbers are going to be way out, way out of whack. So just be careful when you’re doing your bidding to look at what those low upv principle and interest values are as it can come back to bite Ya. Thanks for watching today and remember to listen to us on the good deeds. Don’t miss the podcasts. Thank you and have a good day.