When it comes down to it, purchasing an un-performing real estate note is like buying a boat; the two most enjoyable moments are on the day that you purchase it and then the day you are able to sell it! Investing kingdom valley in a non-performing note (NPN-NPL), and cashing out to make a profit are my two happiest days as a note investor.

There is a common saying in real estate, the profit is made when you buy. How true that is especially true in the world of notes! We've observed that you should think about all the expenses you'll encounter from the moment you purchase it to the day you decide to sell it. consider that when you are deciding whether you're not overpaying. If not, you can lose money, sometimes lots, but sometimes all of it.

While there may be some positive and relaxing feelings when you own the boat, for instance, taking it out to sea for it's first time you are likely to incur a significant amount of ongoing expenses. If you store it in the water, there are charges for dock fees, maintenance costs, insurance, and if you financed itwith monthly installments. If you store it at home or in a parking lot, you'll be required to secure it from the elements and paying rent. You might damage it in the event of an accident while towing it toor placing it in water.

When you have NPNs, the moment of making contact with a homeowner that wants to stay, even though he's doing all he can to avoid being noticed is just as exciting. It usually results in trying to negotiate a payment plan to get them repaying, or settling on a lump sum to pay it off is a wonderful feeling.

If not, then it's death through one thousand cuts.

Sometimes I am convinced that we are getting nickeled and paid to the brim with a variety of service providers: lawyers, note servicers, document custodians, rehabbers, lawn mowers, property preservationists, appraisers, photographers, house cleaners city agencies including code enforcement, realtors from counties, county tax collectors the health department, ordinances on zoning, homeowners associations and utilities forest divisions, trash haulers, flood areas, etc., that all want to get as much money from you as they can every time they change their location or type something.

The most important thing I'm doing now is to identify as many costs as possible before making an offer to purchase notes, so that we can incorporate them into the purchase price. One of the main things we have found in working through more than 50 notes is the cost of borrowing is usually greater, and it can take longer to exit in states of judicial foreclosure. Now that we have some information about repairing real estate, we've been equating possible home repair expenses into our note buying bids to can determine if we are able to earn a profit or if we could lose money.