First we should dive into exactly what non performing notes are, how they are valuable to any investor, not just seasoned investors, and how to go about researching, buying, and non performing note exit strategies.
View http://www.NPNBroker.com for full details on Nationwide Non Performing Notes for Sale.
- What are Non Performing Notes?
Non Performing Notes are just what they sound like. You may ask what is a note. A Note, in simple terms is a mortgage. When a home owner purchases a home with a mortgage this becomes a note. When the home owner defaults, better known as misses a payment, the note becomes non performing. When that happens, the banks typically go through the collection process and then a foreclosure process. This costs the banks money and they do not want to deal with these.
- Why are nationwide non performing notes for sale valuable to any investor?
Non performing notes have multiple exit strategies. NPNs are often discounted heavily from their market value. NPNs are typically offered at a price any new or seasoned investor can afford.
- How do you purchase and research non performing notes for sale?
Non performing notes in the past were only available to the affluent investors, hedge funds, and and often times, investors working on behalf of other countries. Why? Because they purchased 100's of millions of dollars of non performing notes at a time. Now it has become a lot easier to purchase NPNs and the window of opportunity for the smaller investors is now open. You don't need millions, or even hundreds of thousands. Note buyers have purchased individual notes for as little as $2000.
To purchase non performing notes a buyer must work closely with a acquisition firm, or a broker. Typically that is the easiest way instead of trying to go through all the trials and errors in dealing directly with the banks. If you can even manage to get through to them.
You will create a game plan and decide what area you want to buy npns, what your investment amount is, and what your strategy and exit strategy will be. Once an investor gets the basics figured out, the investor can then begin viewing possible notes that may be ideal for the investment plan.
When notes of interest are identified, the investor will go through a verification and disclosure phase. This will require the investor to provide their company info, TIN, physical company address, and contact info. Once a background check is complete and privacy disclosure documents signed, the entire note package will be available to view. At that point the investor will see the address, borrower info, and all pertinent loan details to make a educated decision on purchasing the non performing notes. A bid can be submitted and the process of acquiring the NPNs can start.
- What are the exit strategies for investors purchasing Non Performing Notes?
There are multiple exit strategies for non performing notes, that is why NPNs are an excellent investment for any type of investor. As the owner of the Non Performing Notes, you are now the Bank. You are the Mortgage holder.
1. The investor can hold the non performing note, negotiate new mortgage terms with the homeowner and turn the NPN into a performing note. This will keep the homeowner in their home, and the investor will collect monthly mortgage payments and interest until the homeowner refinances or sells the home. At that time the investor will collect the un-paid mortgage balance.
2. Offer the homeowner the option to short sale. The investor can offer the home owner a non recourse to short sale. No Credit Impact, No Foreclosure, just walk away and keep the home in good condition. Give the homeowner an approved short sale price. This often will be at fair market value, or slightly below for a quick transaction giving you a quick profit.
3. Flip the note to another investor who likes to hold long term
4. Foreclosure on the note and let it go to trustee's auction where investors can bid up the price
5. Hold the property, offer the homeowner relocation funds, and turn it into a rental
There are many options when it comes to NPNs for Sale. An investor will want to look at all options to see what works best for their portfolio and investment strategies.
For an investor who is just getting started, has purchased or tried to purchase foreclosures at trustee auctions, or tried to purchase short sales or bank owned properties, you will find that Non Performing notes are typically easier and have less competition.
Visit http://www.NPNBroker.com for more details and to obtain a list of available nationwide non performing notes for sale.