MilanParticipantDecember 27, 2018 at 7:12 amPost count: 475
Little bellow Patrick posted a post about selling his note portfolio or not. This is amazingly honest post that sums up the bussiness of land selling owner financing. Thank you for your honest description of this Patrick! Very good and very honest. This is pretty much where you’ll end when selling owner financing. I do. It’s a great profit, but boy it’s a hustle. You’re constantly dealing with all kinds of issues from buyers, people not paying, drama on the land, getting them out of your land, selling and reselling the land, begging them for payments, taking their junk out of your land and many others. It’s anything but passive 🙂 I believe it is worth it, but I also understand the sell for cash and be done with it model too like Steve and Jill recommend only now.
Patrick, you ask if you should sell. I think I would sell the whole portfolio for cash if my involvement was getting close to 20-25 hours per week dealing with all kinds of issues from these notes. How much time per week do you spend dealing with these 35 notes per week on average?MilanParticipantDecember 27, 2018 at 7:45 amPost count: 475
On the other side, yes it is not sustainable bussiness like Mike said. I agree. But what a great location independed job you can create for yourself. If you’re looking for a job, this could be a great one. If you want to have great bussiness, this is not the way to go.PatrickParticipantDecember 27, 2018 at 10:20 amPost count: 23
I am not anywhere near 20-25 hours to manage the portfolio even considering reselling defaulted properties. It is probably less than 8 but that is time that keeps me from finding new deals and better properties. Dealing with the same people over and over and the occasional call from the local police gets annoying. I have all the ads ready to repost so no real effort there. There is accounting and paperwork for new loans and defaults. If I was in the 100’s for loans then it would probably be unmanageable. I would choose higher priced loans over quantity.
Here was the original post-
What would you do, sell or hold? Considering selling my note portfolio for cash. I could sell my note portfolio for about $300K. This would be about a 40% discount from the current principle. It throws off about $10,500/month with about 35 loans. The note portfolio has a lot of churn and effort to keep up. In fact, my portfolio at this time last year was, just about $10,500! So many defaults this year. Things are definitely slowing.
Anyway, would you keep the portfolio and the monthly income most likely forever (since most will default) or cash out and buy more land? Could also keep creating notes and sell them as sometimes that is easier than finding a cash buyer.
I want to say just chuck the portfolio and cash out but it feels like its my baby that I have massaged for 3 years. The notes are such a headache with lates and chasing people down and people acting like idiots on the land.MilanParticipantDecember 27, 2018 at 10:47 amPost count: 475
Sounds great Patrick! It looks like you have this note problem many would like to have. I know it’s still a work, but yes if you have everything lined up and it doesn’t take much of your time, you’ve got some very valuable thing going on there. It is a bussiness not a job like I said before. Very cool!MarcusParticipantDecember 27, 2018 at 11:20 amPost count: 70
Patrick are you doing the low down payment, low monthly payments, no credit check model that a lot of land dealers use?PatrickParticipantDecember 27, 2018 at 3:02 pmPost count: 23
I do not do the $99 down $99 month. My notes are all about $185-$300/month and then a bunch at $300-$700. I don’t usually take less than $750 up front. No credit check.Michael AillonParticipantDecember 31, 2018 at 4:34 pmPost count: 265
Interesting. I talked to some Land Geek guys the other day and they proudly tell me that they’ve done hundreds of deals with only 1-2 defaults. I think there’s a happy medium here. Get good down payments and get a convincing story or background about the people you are dealing with. I would think it would greatly reduce the headache component of the business. I’ve done 2 terms deal. 1 is awesome, the other hasn’t paid in 4 months and is living on the land. He hopes to get better work in the spring. I did get a nice Christmas card from him wishing blessings on my family though! :-/
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