1. AN REAL ESTATE INVESTORS GUIDE TO TRANSITIONING TO NOTE INVESTING SPONSORED BY: Real Estate vs. Note Investing

2. About the Presenter Martin Goodman  California Broker  Bought and Sold > 500 properties  Originated more than 3,500 loans | $80M Fund  Purchased of 3 rd Party Loans  Attended over 10,000 foreclosure auctions  Active Personal Note and Real Estate Investor  Founder of www.LoanMLS.comwww.LoanMLS.com  Founder of www.PrivateMoneyLendingGuide.comwww.PrivateMoneyLendingGuide.com

3. The Big Picture Investing in Notes vs. Real Estate Similarities  Collateral  Valuation  Inspections  Appraisals  Title  Escrow  Due Diligence  Insurance  Closing Differences  Lien vs. Ownership  Borrowers vs. Tenants  Credit Underwriting  Documents  Leverage  Foreclosure

4. Collateral, Collateral, Collateral Evaluate the Collateral As If Buying It Arrange Inspection Drive By if Possible Run Your Own Comps Order an independent BPO / Appraisal Important Note: Ability to Evaluate depends on Originating New vs.Buying Existing Note

5. Tile, Escrow & Insurance Lender’s Policy for New Origination Title Endorsement for Existing Notes Use an Escrow to Close Insurance –additional insured vs. policy holder

6. Due Diligence Review Note and Loan Documents Underwrite Borrower’s Credit Inspect and Value Property Review Title Preliminary Reports

7. Differences in Note Investing Lien vs. Ownership Borrower vs. Tenants Credit Underwriting Documents Leverage Foreclosure

8. Lien vs. Ownership Less risk, but not “no risk” No maintenance (generally, unless borrower bails) Multiple choices of liens  1 st – safest  2 nd – risky and more difficult to service  3 rd + uber-risky, but high yields

9. Borrowers vs. Tenants No “TNT” (Tenants and Toilets) Service a Borrower (outsource this) Monitor other Liens Watch Property for “waste” Monitor Insurance

10. Credit Underwriting Care as much about Borrower as Collateral The 3 Cs to Underwriting  Credit  Capacity  Collateral

11. Documentation & Leverage Similar to Real Estate Investing, But…  Mortgage ( or Deed of Trust ) vs. Deed  Disclosures to Borrower  Loan Servicing Leverage  Cannot easily obtain against a note investment  There are not “mortgages” against “notes”

12. Foreclosure Foreclosure is like an Eviction of a non-paying tenant, but typically expect a foreclosure to be:  More Expensive  Take More Time  Requires More Knowledge and Diligence  Rules vary by State  Potential Liability from Municipalities

13. Resources LoanMLS –Loan Exchange  6,000 Members  Buy Notes by Geographic area Buy Notes  Sell Notes without paying a commission Sell Notes  Demo Site Private Money Lending Guide  Find hard money lending brokers & articleshard money lending  Borrowers use the site to find hard money lendershard money lenders  Demo Site

14. Thank You Thank you for attending. Visit LoanMLS at www.LoanMLS.com Visit the Private Money Lending Guide at www.PrivateMoneyLendingGuide.com