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Due Diligence Steps for Note Investing
Brett Burky avatar
Written by Brett Burky
Updated over 7 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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