As a national instructor/trainer, one has a tendency to create certain phrases and use them over and over again because they are easy to understand and get right to the point. One of my many phrases is, “every note for sale is a deal for someone, you just have to figure out if it’s a deal for you”. That statement does get right to the point but it also says that YOU have to be able to figure out if it is a good deal for you.

That can be easier said than done and is why training and education in due diligence and exit strategies are so important. One of the most overlooked areas is what I call the “secondary level” of exit strategies, which leads to my question for you:

Are other investor making money on NPL deals that you pass on

because they know more exit strategies?

When you ask a note investor what their exit strategies are for non-performing notes, the quick response is usually, loan workout, deed in lieu or foreclosure. In the big picture, that is the best answer but when you are going to invest in something, doesn’t it make sense to eliminate or manage as much risk as you possibly can? By extension, doesn’t it make sense that you can’t manage what you can’t measure? Of course. That’s why it makes sense to broaden you knowledge and understand of multiple exit strategies and run the numbers on them before you buy.

I recently read an article in DS News that said the 2 main exit’s when you own real estate are to buy and hold or fix and flip. Unfortunately, I think that a large number of real estate and note investors just think of those 2 “outs” when they acquire property. Isn’t that what all the TV shows are about?

In this area, more experienced NPL investors see what others do not. One of those things are more profit yielding “outs”, for example:

  • Sell as-is for cash
  • Sell as-is with financing (to investor or contractor)
  • Sell as-is with table funding
  • Renovate and rent (consumer, section 8, AirBnB, by the room, Adult living)
  • Renovate, rent and then sell to turn-key rental investor
  • Renovate and lease/purchase note
  • Renovate and sell
  • Renovate and sell with financing (one note or two)

So every note for sale on Paperstac is a deal for somebody, you just have to figure out if it’s a deal for you. Explore these secondary exit strategies and you will find more deals fit you then you thought.

Kevin Shortle

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