If you understand what a note is, have read the pros and cons, and are ready to dive in…the logical next step is to start looking for a note to buy. I’ll go over the method I use first and then discuss a few alternatives.
There are several online note marketplaces but one of the largest is FCI Exchange. They are part of the same company as FCI Lender Services, which is the largest note servicing company. I like them because they are backed by a reputable company, they have a good transaction portal that lets you go step-by-step with the seller and their administrators, and many notes are already being being serviced by FCI. If I buy a note that is already serviced by FCI and intend to keep using them for servicing (as I do for most of my notes), the transition is much shorter and smoother than if I were to transfer the note to another servicer.
Go to FCI Exchange and use the Grey “Note Quick Search” box to enter some basic criteria. I am usually interested in Performing 1st Position Loans, so I would choose Performing under Loan Status and 1st under Loan Position. I generally leave State to “All”, but if you are only looking in a certain area, choose appropriately there.
After hitting Submit you should see a list of results like the following.
At the time of this writing, there are 58 performing 1st notes for you to browse.
The first column in the results list will show a FCI Diamond Note icon if the note is currently being serviced by FCI. I generally prefer these types of notes given the ease of transition, but I’ll consider notes serviced elsewhere also. I’ll generally investigate any note within my budget on this list. I’ll go into what I look at (and how to look at it) in the next guide on Due Diligence.
Some other online exchanges that I have not personally used to buy a note, but are worth looking into: