Non-Performing Notes Pt 2 + Teleseminar Tomorrow!
Published: Mon, 07/22/13
July 22, 2013
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IN THIS ISSUE: Non-Performing Notes: The Interview With
Jack Krupey, Part II
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Hi ,
Tomorrow, Tuesday, July 23 I will discuss investing and brokering
performing and non-performing notes on a free teleseminar with
Jackie Lange of cashflowdepot.com.
Please save the date and call in:
1-206-402-0100
Access Code 929815#
The teleseminar starts at 5 p.m. Pacific; 6 p.m. Mountain; 7 p.m.
Central; 8 p.m. Eastern.
E-mail your questions for me to jackie@cashflowdepot.com
And if you missed the announcement, last Thursday's teleseminar on
non-performing notes with Gordon Moss is now posted. Go to
www.PaperSourceSeminars.com and scroll down to the end of Gordon's
bio. It's under "Here's a preview..."
Cheers,
Bill
W. J. Mencarow
The Paper Source, Inc.
www.PaperSourceOnline.com
www.PaperSourceUniversity.com
P.S. Only 8 days left before the Early Bird price of $394.00
for the "Profits In Non-Performing Notes" seminar in Las Vegas
Sept 27-28 expires forever! www.PaperSourceSeminars.com
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Non-Performing Notes: The Interview With Jack Krupey,
Gemini Capital Managers
Part II
Part I is posted at
http://papersourceseminars.com/jack-krupey-on-non-performing-notes/
Jack Krupey is a partner and portfolio manager for Gemini
Capital Managers LLC (http://geminicapitaladvisors.com/), a
multi-million dollar fund focused on buying non-performing and
re-performing residential mortgages. Previously Jack worked as an
asset manager and trader for a Wall Street fund buying large
portfolios of distressed debt. He currently oversees a growing
portfolio of over 100 non-performing and re-performing notes and is
actively buying, selling, and brokering such notes.
Jack: I think anyone who's tired of being a landlord, anyone
that's looking for deals and can't find deals at the courthouse
steps anymore because the big hedge funds are now buying at the
courthouse steps in some markets, anyone who is brokering notes
and wants to expand their horizons, should take a close look
at non-performing notes (NPNs).
Bill: Do you work with note brokers?
We work with note brokers, real estate brokers, mortgage
brokers, bankers, lawyers, accountants, financial planners --
anyone who has NPNs come across their desk. We're very easy to
work with.
Bill: Do you have NPNs available for investors?
Jack: Absolutely. The inventory changes regularly, of course.
We have hundreds of loans that we own ourselves. We also work
with a few hedge funds here in New York that don't have a sales
team and will give us a look inside their portfolio for loan sale
opportunities.
If there's a specific area of interest or a specific type
of loan that you're looking for, we can help find it.
When we talk to people we do try to take a consultant
approach and try to determine your risk tolerance. Are you
looking for a very safe equity-protected performing loan?
Or are you looking for a more aggressive deal where you can
buy a non-performing loan where there's a good chance you can
foreclose and take the property and flip the property?
We'll sit down and really try to customize some suggestions
to you that make sense.
Bill: What do you like to see from those (such as note brokers,
etc.) who refer a non-performing note to you?
Jack: I just ask for a little bit of information so I can
determine if it is a good opportunity. We don't have an exact
forum, because every deal is a little different.
The bottom line is value; what the current value of the
house is, which is sort of a moving target, but there's a lot
of information available between Zillow and Trulia, looking at
actual comps, calling a local agent. Value is the key; what's the
value and what's the approximate range the seller may take for
the note?
Bill: It sounds like you're saying That what someone who brings
you a note should do is try to put themselves in your shoes, and
just get as much information as you possibly can.
Jack: Exactly. You might be starting as a broker and you might see
a deal that's so good that you say, "You know, I might as well use
my own money for this deal." We always have a supply, whether
they're our loans or we have a number of funds that don't actively
sell that will let us make reverse inquiries. We can sell loans off
of their portfolios as well.
Bill: If an investor is interested in looking over your offerings,
how does he or she do that?
Jack: Just send us an email. Fill out the form on the website
( http://geminicapitaladvisors.com ), shoot us an email
( info@geminicapitaladvisors.com ).
It's a very customized approach. I don't have one big list
that I just circulate. A tape or a spreadsheet alone ends up growing
legs after a while. On more than one occasion I've had my own list
of loans offered to me to buy, by someone I didn't even know.
We really try to work on a custom approach. If you call us
and say, "Hey, I'd like to buy a non-performing loan in Texas,
Tennessee, Arkansas, or just any state that's a clean deal,"
if you are flexible enough to do a deal almost anywhere that makes
sense, we can probably provide you with what you're looking for.
We're really good at showing clean deals that are in middle
class or above neighborhoods in various parts of the country,
you're buying it at a discounted value, maybe the loan was
recently reperforming and the borrower's story makes sense where
they have the income to pay the loan now. The only reason they were
behind was because of either something happened in the economy
during the financial crisis or a job loss or even a strategic
fault.
There are people who owe $200,000 on houses in Florida that are
worth $100,000. If you tell them they could have a reasonable
payment based on a current value of the house, they start paying
you right away.
Bill: What percentage of your deals do you foreclose on?
Jack: We only foreclose on maybe 25% of our deals. Some of those
are properties that are vacant, that we knew we would foreclose
before we bought the note.
A lot of them are able to be modified or something else can
be worked out with a borrower, whether it's giving them cash for
keys or doing a deed in lieu of foreclosure -- which is relatively
similar, but the reason I list the two differently, cash for keys
versus a deed in lieu, is that title is not always clean. We've had
deals where people have handed us the keys and we have controlled
the property, we put a tenant in it and rent it, but we don't
actually forgive and release the mortgage because there's a second
mortgage or other judgments.
In those cases we're essentially foreclosing on ourselves.
We have control of the deed but we are still the mortgage company.
This way we're able to make some income while we're foreclosing.
We're essentially foreclosing just a clean title and wipe out any
second mortgages or third mortgages or judgments that are on title
behind us.
This is something I will cover in more depth at the
seminar in Las Vegas. I'm going to go through a presentation driven
off of actual deals from 2012 and so far in 2013. I'm going to cover
some of the basics of why you would buy non-performing loans. As
I'm doing that I'm going to show examples. When I talk about a
borrowers that want to stay and pay, I'm going to show you a number
of deals what we paid for them, how we get them reperforming and
what our cash flow is, based on buying a loan in the deep-discount
and getting payments collected. I'm going to show some
foreclosures, loans we bought, we foreclosed, we sold.
I'm not going to just show all the pretty deals that went
perfectly. I'm going to show a couple deals that were a little more
challenging, how we worked through them and how we made money.
We expect a strong turnout of real estate and note
investors and brokers, hard money lenders and others who want to
learn how to buy discounted loans from banks and hedge funds. This
will be a tremendous learning and networking opportunity!
Among the topics we will cover in this intensive class are:
- The Big Picture Strategy
- Why Notes? Why Now? Why Firsts? Why Seconds?
- The Terminology Defined
- Where To Find NPNs
- How to Quickly Analyze A Deal
- Due Diligence Checklist
- Invest or Broker?
- The Buying or Brokering Process
- The Paperwork
- Waking Up The Borrower
- Biggest Challenges & How To Overcome Them
- The Workout Process
- The "Art of the Deal"
- Exit Strategies
- More Profit Possibilities
- Re-performing Notes
- Cash Flow or Cash Out?
- Loan Servicing
- Advanced Strategies & Tactics
What you will NOT get:
- Sales pitches
- Speakers with no hands-on experience
In addition, Gordon Moss and I will show you, step-by-step,
actual deals we completed in the past 12 months from initial
purchase, borrower contact, and exit strategies employed including
foreclosure, loan modification, loan sale, and cash for keys.
And you will learn how to buy performing loans that have
already been modified by hedge funds to earn double-digit returns
just by collecting payments.
Plus, you will learn cutting-edge techniques of dealing with
defaulted debtors and turning the notes into re-performers.
This is the only seminar of its kind and will only be offered
once in 2013. For additional details and to register,
see www.PaperSourceSeminars.com
The Super Early-Bird $200 Discount expires midnight
Wednesday, July 31 -- just 8 days from today!