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Deal Sourcing

Deal Sourcing

Encyclopedia terms, articles, and lessons about deal sourcing.

Articles

How to Buy Your First Mortgage Note: A Step-by-Step Guide for New Investors

Buy your first mortgage note step by step: entity setup, proof of funds, servicer selection, due diligence, bidding, and closing the deal.

February 13, 2026

How to Acquire Mortgage Note Investments

Mortgage note acquisition workflow: from finding sellers and reviewing the tape through LOI, due diligence, funding, and collateral verification.

January 29, 2026 · Ep. 24

Understanding Tapes and Bid Templates

Tapes and bid templates in note investing: how to build a repeatable system for analyzing loan data and submitting disciplined, winning bids on note pools.

January 28, 2026

Unlikely Sources for Diamond-in-the-Rough NPL Deals

Five off-market NPL sourcing strategies — from reverse-engineering foreclosure filings to banker conferences — to find deals before the competition.

January 22, 2026 · Ep. 23

Vetting the Seller

Most investors focus on analyzing the asset — but the real leverage is knowing who’s on the other side of the deal and how they operate.

January 15, 2026 · Ep. 22

Broker vs Direct-to-Seller Sourcing

Most investors focus on finding deals — but the real leverage is where those deals come from, who controls the flow, and how to access both channels.

January 14, 2026

How to Find and Buy Real Estate Mortgage Notes for Sale

Seven sourcing channels to find mortgage notes for sale: marketplaces, brokers, GSE auctions, and direct-to-bank outreach for deal pipeline.

January 13, 2026 · Ep. 21

How to Find Note Sellers

Most investors chase properties because that’s what they see — but the real power in real estate has always been owning the debt.

Lessons

Sources of Mortgage Notes

Acquisitions · Lesson 1

Due Diligence Overview

Due Diligence · Lesson 1

Vetting Your Loan Seller

Acquisitions · Lesson 2

Reading the Data Tape

Acquisitions · Lesson 3

Brokering & Matchmaking Notes

Mortgage Notes 101 · Lesson 3

How to Price & Submit Bids

Acquisitions · Lesson 4

Bring In the Deal Flow

The $1M Real Estate Roadmap · Lesson 4

The Note Investor Funnel

Acquisitions · Lesson 5

Encyclopedia Terms

Acquisition Costs

Acquisition costs are all expenses beyond the note's contract price — due diligence, title search, BPO, recording, and broker fees — that determine true.

An appraisal is a licensed appraiser's formal property valuation following USPAP guidelines. The gold standard for note investors, but typically reserved.

Assumable Mortgage

An assumable mortgage can be transferred to a new borrower with the original interest rate, balance, and terms intact — no due-on-sale clause triggers.

Best execution is the strategy of choosing the resolution or sale method that maximizes net returns on a note, balancing price, speed, and risk.

Best price is the highest achievable sale or recovery amount for a note, driven by loan characteristics, market demand, and bidding strategy.

A bill of sale is a written receipt confirming loan ownership has transferred to the buyer after funding. It typically appears as Exhibit B of the loan.

BPO (Broker Price Opinion)

A BPO is a real estate agent's property value estimate based on comparable sales and an exterior inspection, costing $50-$100. The primary valuation tool.

A note broker connects sellers with buyers and earns a fee at closing. Experienced investors prefer dealing directly with the principal asset owner to.

A bulk sale is the purchase of a large group of mortgage notes in a single transaction, typically at a volume discount for absorbing the entire portfolio.

Cherry-picking is selecting individual loans from a larger pool rather than buying the entire tape, letting note investors target assets that fit their.

A counter offer rejects original terms and proposes new ones. Note investors use counter offers when negotiating loan purchases and borrower settlements.

A daisy chain is a deal structure where multiple brokers sit between buyer and seller, each adding fees. Daisy chains inflate pricing and reduce the.

Deal flow is the pipeline of note acquisition opportunities from sellers, brokers, and direct sourcing. Consistent deal flow is essential to scaling.

A down payment is the cash portion of a purchase price paid upfront. For note investors, it influences LTV, default risk, and can accelerate returns on.

FMV (Fair Market Value)

Fair market value (FMV) is what a property would sell for between willing parties — the most important data point for note investor pricing and risk.

FSBO (For Sale by Owner)

FSBO means selling an asset without a broker. In note investing, direct seller deals often offer better pricing, flexible terms, and less buyer.

Government-Sponsored Enterprise

A GSE is a federally chartered entity like Fannie Mae or Freddie Mac that increases mortgage market liquidity by buying and guaranteeing loans.

An indicative bid is a non-binding preliminary offer on a note or loan pool submitted before full due diligence, establishing a price range based on.

Loan-level refers to data, analysis, or pricing applied to each individual loan in a portfolio — the foundation of accurate bidding and due diligence for.

A loan pool is a group of mortgage loans bundled for sale as one transaction. Pools are how banks and GSEs sell mortgage assets and how note investors.

LOI (Letter of Intent)

A letter of intent (LOI) is a non-binding document outlining proposed price, timeline, and contingencies for a note purchase — bridging the indicative bid.

LPSA (Loan Purchase/Sale Agreement)

The LPSA is the binding contract governing a note sale — defining price, reps and warranties, repurchase provisions, and collateral delivery requirements.

Owner Financing

Owner financing is when a property seller provides the loan directly to the buyer, creating a private mortgage note tradeable on the secondary market.

A pool buyer is an investor or fund that acquires mortgage notes in bulk portfolios, accessing wholesale pricing unavailable to individual note buyers.

Scratch and Dent

Scratch-and-dent loans were rejected from securitization or agency pools and are sold at a discount in the secondary mortgage market.

A scratched loan is removed from a pool before closing because due diligence uncovered title defects, missing documents, or other issues.

Secondary Mortgage Market

The secondary mortgage market is where loans and servicing rights are bought and sold after origination, providing deal flow for note investors.

A note seller is the entity selling mortgage notes in the secondary market. Seller type and motivation directly impact deal quality and pricing.

Sharpen Your Pencil

"Sharpen your pencil" is note industry slang from sellers signaling that a buyer's bid is close but not high enough to win the deal.

A tape is the loan-level spreadsheet a note seller provides to buyers listing every asset for sale with key details like UPB, lien position, and status.

A whole loan is a single mortgage traded as one asset. The buyer owns the debt, controls the workout, and makes every resolution decision directly.