Please forward this error screen to 64. In this difficult real estate market, many real estate investors are starting to look at note investments as a paying mortgage vs investing opportunity to earn above market returns.
Learn how to negotiate the best loan investment transaction. Insurance issues relating to loans and REOs. There are many similarities between investing in real estate and investing in notes, including evaluating the collateral, and working with title, escrow and insurance companies. If possible, get an independent interior appraisal, visit or drive by the property. If the property is older, or has any unique characteristics, you may also wish to have the collateral inspected, just as you would when purchasing real estate.
Inspections are easier to conduct when originating new notes than purchasing existing notes because the inspection can be made a condition of the note funding. Once a note is funded, the occupant may not be as cooperative. Just as you want clear title when purchasing a home, so too is the case when investing in a note. For new notes, you will obtain a lender’s policy to insure your note will record in the desired lien position. Escrows are used to originate new notes but are less common when purchasing existing notes. For a new note, escrow is often collecting borrower signatures, obtaining proof of insurance, and managing the closing of the original note.