DJ Olojo
DJ Olojo has been a guest on Collecting Keys, the real estate investing podcast hosted by Mike DeHaan, Dan Austin and Dylan Koch.
Diversify Your Portfolio with Notes: A Guide to Note Investing w/ DJ Olojo
DJ Olojo joins Mike DeHaan and Dan Austin to break down how non-performing note investing fits alongside his rental, property management, and fix-and-flip verticals. He explains how notes are priced off unpaid principal balance, the due diligence documents required to keep a note enforceable, and shares a Kentucky deal where a statute-of-limitations defense wiped out a $30,000 debt he'd paid $10,000 for. He also covers running a business with his wife and why he wrote The Foreclosure Fix for homeowners rather than investors.
Key takeaways
- Non-performing notes trade at a discount to unpaid principal balance (UPB) — performing paper can go for 75–100%+ of UPB, while non-performing may trade anywhere from 80% down to 20%, depending on rate, term, borrower strength and property.
- Note due diligence is everything: you need the recorded mortgage or deed of trust, the physical note (not a copy), allonges, assignments and payment history. Miss a piece and the note may be unenforceable — DJ lost a little over $10,000 plus attorney fees on a Kentucky note that had passed the statute of limitations.
- DJ buys notes inside self-directed IRAs because there's no depreciation or tax shelter on note income, and because the capital can sit illiquid for a year and a half without competing with flip opportunities.
- Notes are a relationship business — big hedge funds buy institutional paper first, then it trickles down through smaller funds, so a small buyer picking up onesie-twosies pays a much higher percentage of value than the original buyer.