It was surprising that not even one person showed any interest in the performing note I offered a few blogs ago. It was such a good deal! I really considered buying the note myself (through my SEP-IRA), but after some research I found that you have to conduct all the SEP-IRA transactions completely at arms-length. While, I’m not 100% certain, I think my affiliation in both companies would make it unlawful. That said, you guys should think about using your retirement funds to get into a high-interest, well collateralized performing note is a really good idea.
All of our current notes have been sold, but our company will have other deals like in the future, so I want you guys to start thinking about those type of investments. I’m sure I will offer up some more. (The first step in doing creative IRA stuff is to get a self-directed custodian).
As far as our packages are going, the original 27 house list is getting close to wrapping up. We expect to end up right around a 75% return. We had hoped to clear 100%, but we made a few mistakes and overall could have been more efficient than we were. Our biggest mistake by far was trusting the homeowner’s too much. So often, they would seem on board with our plans to help them out. Then, they would just straight flake out. I guess that seems obvious that you shouldn’t trust dead-beats, but some people are just so damn believable. Lesson learned. I think if we went back in time, with our current knowledge, we’d clear a 100% return, no problem.
The 55 house list is still going strong. It is however, taking longer than we had hoped. We had a miscommunication with our foreclosure attorney that costed us some time – again I chalk it up to growing pains of a new company. If you are an investor, you will probably get 3-4 more quarters of interest, and with a big chunk of your investor capital coming in 2-3 quarters. After March 31st, tax season, there is really no reason to hold any money in our account, so it will all be getting distributed back to investors.
The third project has been quite a roller coaster thus far. We got an amazing deal buying it as I mentioned before. The problem was that in return for getting the package for pennies on the dollar, we had to take on some title issues. Well, they ended up being worse than anticipated. That wouldn’t have been particularly problematic, if the seller wasn’t a total putz and acted even close the the way he was contractually obligated. Because of his ineptitude, we’ve incurred much expense and wasted time. He sends us replacement files, so we spend a week doing due diligence, and then he says he find the files. Stuff like that has made this process unbelievably frustrating. We are asking for a large settlement and/or will take him to court for the damages he’s caused.
Anyway, we do have clear assets now, and while we’ve decided that while we are still open to selling them if the price is right, we are going to work them through. That’s pretty what our company does bets. These assets are strong and have a BPO of easily over 1.5-2x the original investment (even thought it’s only 60% of the files!). Anyway, with all the files, our team and I are going to be working like a crazy over the next year. I’m in my element when I’m singularly focused, so although it’s just a ton of work, I’m feeling really good about it.
I justed finished a spreadsheet of some of the files we are working. I’ve done a BPO analysis and a lot of preliminary work needed to start a project like this. If you are serious about the note game, I’d be more than happy to share it via email. Just hit me up.
justinsadauskas 