Exercise: Build Your Business Profile

This exercise asks you to make real decisions about your note investing business. Don't treat it as hypothetical — use your actual situation, actual state, actual capital. The more concrete your answers, the more useful they'll be when you start buying.

Part 1: Entity Structure

Draft the following:

• Entity name. What will your LLC be called? Check availability in your state of formation.
• State of formation. Where will you form your LLC, and why?
• Entity type. If LLC, will it be single-member or multi-member? Manager-managed or member-managed?
• Asset-holding entity. Do you need a separate LLC to hold purchased notes? If yes, why? If not now, at what point would you consider adding one?

Write 2–3 sentences explaining your structure choice and how it fits your situation.

Part 2: Buy Box

Define your initial buy box by filling in each parameter:

• States (list 3–5 target states and your reasoning — foreclosure timeline, property values, familiarity)
• Lien position (1st, 2nd, or both — and why)
• UPB range (minimum and maximum, tied to your available capital)
• Property types (SFR, condo, manufactured, multi-family — what you'll consider and what you won't)
• Performance status (NPL, RPL, performing — what you're targeting and why)
• Any exclusions (states you'll avoid, property conditions you'll pass on, deal sizes that don't work)

For each parameter, include one sentence on your reasoning. "I chose X because..." forces clarity.

Part 3: Servicer Criteria

1. List 3 criteria you would use to evaluate a loan servicer. Think about what matters for your buy box — the states you operate in, the asset types you're targeting, the volume you expect.

2. Research one servicer. Find a servicer that handles non-performing residential mortgage loans and note the following:

   • Boarding fee (per loan)
   • Monthly servicing fee (per loan)
   • Minimum portfolio size (if any)
   • States they cover
   • Any specialization (NPL, performing, both)

3. Write 2–3 sentences on whether this servicer would be a good fit for your buy box and why.

Complete this exercise before moving to Module 2. Your buy box will evolve — the goal here is to start with a clear, defensible position.