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Due Diligence Steps for Note Investing
Brett Burky avatar
Written by Brett Burky
Updated over 10 months ago

To get even more education about note investing, check out the Paperstac Academy.

Investment Objectives

  • Define your investment goals, risk tolerance, and desired returns.

Market and Note Research

  • Understand current market conditions and trends.

  • Learn about different types of notes and their legal and regulatory aspects.

Note Sourcing

  • Set up an account on Paperstac.com

  • Set up your Saved Search on the Paperstac platform

Note Performance Evaluation

  • Assess payment history. For a more detailed explanation, please reference this article: link

  • Evaluate the collateral value and any existing liens or encumbrances.

Title Search and Collateral Review

  • Conduct a comprehensive title search to verify ownership. Contact support if you need a resource for this.

  • Review property condition reports and appraisals.

Legal and Regulatory Compliance

  • Ensure compliance with laws and regulations.

  • Review loan documentation for accuracy and completeness.

Pricing and Potential Returns

  • Analyze the pricing of the note based on outstanding balance and interest rate.

  • Calculate potential returns considering purchase price, expected payments, and expenses.

Negotiation and Closing

  • Negotiate transaction terms with the seller or their representative.

  • Review and finalize all necessary documents.

  • Complete the transaction according to legal and industry practices.

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