Catherine Bell walks through how to value mortgage notes banks are selling. She uses a 150-point checklist and spreadsheet formulas to filter by jurisdiction, loan characteristics, and delinquency length, then calculates the purchase price needed to hit ROI targets. The key: let the numbers decide, not emotion.
Hey everyone. I am here to answer the question that I keep getting asked by a lot of people is how do we value notes that we're buying from banks? One of the things that I've always done is I am a spreadsheet nerd. I love my numbers. And as long as we can do the numbers, I tell our team, do the numbers. Numbers tell you what to do. So it always comes down to the numbers. As real estate investor rule number one, never, ever, ever fall in love with a property. Because when you do that, then you start ignoring the numbers. And that's a problem because you're an investor first. And so what we do inside of analyzing, we actually have 150 point checklist that we go through that we have created around what works for us and our investing model. So it would go down from all the way. The beginning is like which states, which states do we invest? There's lots of criteria around why we have chose these particular states. So that automatically eliminates a whole bunch of notes that we wouldn't bother to even look at. Then from there we start looking at the value, the unpaid balance upb and then we start looking at just the numbers around how long it hasn't been paid, the interest rate, everything like that. And so when we create those formulas all ultimately it whittles us down and gets us really, really clear which assets will and won't work for us. And then the next part is to calculate what we need to buy it for so that it actually makes sense for us financially, for us and for our investors. And so that's what we do. We continue to work backwards inside of what the amount we need to make an roi, return on investment. And then from there that's when we place our bids and that's what we buy our notes at. So I hope that was helpful. This is Catherine Bell with Titan Impact Group. We are the sentinels of the American dream. And we leave every person, property and community better than we found them. Bye for now. Thanks everyone.
