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Note Investing Report 2021: A Helping Guide For Mortgage Note Investors

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This year is coming to the end, and we are ecstatic to welcome 2022.

We hope that the year brings us the best to us all, especially those who are in real estate notes investing

But what has 2021 proved so far?

Compared to lands, investors have chosen to invest in mortgage notes. The ratio is  20: 80, and even more than that. This shows that people are becoming more interested in notes.

What does that mean for 2022?

We think that this trend will continue to grow in the future. More people will be interested in mortgage notes, and it means stiff competition.

So, if you want to start investing in 2022, you need to gear up for it.

Now, let’s see which notes are sold? 

70% of the notes sold are performing, and the rest are non-performing.

It’s quite expected, given that performing notes are easiest to deal with.

So, both new and veteran investors try them out. 

But we have seen a steep increase in the number of purchases where non-performing notes are bought.

This means people are realizing that non-performing notes are worth the money. Yes, they may need some additional work, but they are worth it.

However, not everyone can put in the effort. So, if you want to pursue this option, you can be provided, you have the right resources.

Now coming to the position.

We have always said that 1st position loans are always worth exploring.

And most of the assets sold belong to this category. 2nd position assets are trickier, but again, it’s a matter of perspective. 

What about single assets and pools?

Well, the trend shows that single assets are sold more rapidly, like 95%, compared to pools.        

The payment option used in most of the transactions is Escrow, nearly 70% of people use it for this purpose. Only 30% of the transaction directly went to the seller.  

In 90% of these deals, a collateral is used, and a third-party auditor is hired for this purpose. 

For performing, 1st position real estate notes, this is the detailed breakup of sale price:

  • Minimum: $5k
  • Maximum: 190k
  • Average: $39k  

This is a steep increase than the sale price of these notes, even a year ago.

For non-performing notes:

  • Minimum: $2k
  • Maximum: $150k
  • Average: $19k  

Contrary to the previous note, we can see a decline here.

What’s the deal with 2nd position, performing notes?

  • Minimum: $3k
  • Maximum: $90k
  • Average: $35k
  • The price has been lowered by 5%.

For non-performing notes, this is the tally:

  • Min: $2k
  • Max: $150k
  • Average:$15k  

In the previous, the figure is 93% lower than the present data. 

What will the investment value of these options:

  • Minimum value: 5%
  • Maximum value: 105%
  • Average: 40%

This is for performing, 1st position loans, 15% higher than the previous year.

  • Minimum value: 2%
  • Maximum value: 30%
  • Average: 25%

This is for non-performing, 1st position loans, they are 16% lower than the previous year.

  • Minimum value: 3%
  • Maximum value: 30%
  • Average: 5%

This is for performing, 2nd position loans, they are 29% lower than the previous year.

  • Minimum value: 1%
  • Maximum value: 11%
  • Average: 5%

This is for non-performing, 2nd position loans, they are 77% lower than the previous year.

The unpaid principal balance is as follows:

  • Minimum value: 46%
  • Maximum value: 105%
  • Average: 84%

This is for performing, 1st position loans, they are 8% higher than the previous year.

  • Minimum value: 8%
  • Maximum value: 90%
  • Average: 55%

This is for non-performing, 1st position loans, they are 15% lower than the previous year.

  • Minimum value: 27%
  • Maximum value: 95%
  • Average: 54%

This is for performing, 2nd position loans, they are 5% lower than the previous year.

  • Minimum value: 1%
  • Maximum value: 65%
  • Average: 40%

This is for non-performing, 2nd position loans, they are 75% lower than the previous year.

If you want to buy and sell real estate notes, then you need to consider these stats. 

The best places to buy these notes are as follows:

BankProspector

This platform is the ideal place to start note investing and is used by note investors, and REO agents. Both commercial and non-commercial note brokers use this platform.

Read More: What to do Before Investing in Real Estate Ntes- 2022 Guide

What are the benefits of using this platform?

  • There’s no need to deal with any middlemen or jokers
  • You can check the real history of the note and can ascertain the value
  • Here, you will get detailed information about key contacts, and people who can help you with the decision-making. 
  • No need to desperately follow false note investors, who coin themselves as private note investors       

Paperstac

Paperstac is another platform you should consider trying if you want to buy and sell these notes. The service charge is minimal, and it has the strongest protocol in place.

What are the characteristics of this platform?

  • It offers a timeline view of all the data, including communication data, along with insights.
  • It also has a consolidated platform that can act as a reader’s digest 
  • You can come across different electronic notary functions that can play a vital role in coordinating signatures and data. 
  • It also contains a step-by-step guide on how to proceed while dealing with mortgage notes.

Fund That Flip

This is the best lending platform for new investors, and it is quite user-friendly. You can get wonderful insights on this platform on how to generate passive income through mortgage notes. All the notes available here are vetted by industry experts.

Why should you choose this platform?

  • If you are interested in low-risk loans, then this is the ideal place.
  • All these notes are of high quality and have a high yield rate.        

LoanMLS

The ideal place for more than 25,000 mortgage note buyers, and a lot of sellers.

Why choose this option?

  • The best place for new loan providers or brokers
  • The ads can tell you about the latest offers
  • No need to pay fees or commission
  • You can get in touch with hard money lenders here   

If you want to learn more about the subject, then you can try Note Conference. 

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