The official cash flow note thread

5808 Views 19 Replies 10 Participants Last post by  ChumpChange
I'd like to learn more about this topic, as I think others would as well. Dirago, if he's watching, seems to know the most, or at least a good deal on the subject.

I've been involved in the Stock market for many years, but would like to find something more consistant. What're some good books, because I'd like to read more about this.

Does anyone have any stories to share?

- Nate
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Over the past five years, I have invested my portfolio heavily in private money financing consisting of 1st and 2nd TDs on properties in the Orange County / Los Angeles area. I've stayed out of the distressed debt market and instead have focused on the fact investors can have a great return on ivestment due to banks no longer lending to people even though the transaction makes sense. Properties with a LTV under 60% in an already depressed market. I basically put people who need money(through loan brokers) in contact with those who have money(who I represent). I've written approximately $45,000,000 in notes through that time. I am starting a new phase over the next couple of months actually setting up a Reg D fund.

There's a lot of opportunity out there. Protect your money and more importantly, protect others'.

Industry Overview:

The Capital Markets are paralyzed due to recent regulatory changes, poor underwriting, inflated home prices and a global recession. The mortgage industry is experiencing high delinquencies, legacy issues, archaic technology, inadequate workflow and capital restrictions.

The new lending environment is an ultra-conservative one, where financial institutions are reeling over past indiscretions. The majority of borrowers can’t qualify for the government-sponsored loan programsneeded to obtain real estate financing today. With the MBS and CMBS markets frozen, direct portfolio lenders are left to fill the void.

The financial crisis has created a tremendous opportunity for a portfolio lender to generate high yielding conservative loan-to-value loans that are not high cost and are in compliance with the new Dodd-Frank (H.R. 4173) Wall Street Reform and Consumer Protection Act; but do not qualify under any Fannie Mae, Freddie Mac and FHA guidelines.
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My advice is to not attempt to chase seller financed note deals.
Absolutely agree! Seller's have other motivation beyond a return on their money when selling a property. Those notes often carry a higher LTV and a lower interest rate than a note written without a sale in mind.
What type of collateral are you lending against? I assume NOO RESI and CRE? OO RESI hard money seems to have mostly disappeared due to increasing origination regs.

Best of luck with setting up your fund.
We're lending on NOO, OO RESE as well as some CRE all within the postal codes of coastal property in SoCal.

Chump, was this the thread you were referring to for me to check out? was the house liquidation thread as it was referring to what happens and what you need to be able to do when somebody doesn't pay you back on what you lent them:
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