The two things that actually break on 31 land notes

The licensing question is the one I would have blundered into. I am mid way through getting licensed on the brokerage side and nothing in that coursework touched loan servicing at all. Did the attorney distinguish based on whether the notes were consumer purpose?

$18 a month is too cheap and you found the proof yourself. You cut delinquency from 22% to 9% on a 31 note book. If the average payment is $400 that is roughly $1,600 a month of collections you moved from late to current, and you are charging $558 for the whole book. Third party servicers I have looked at run higher than that per note and do less hand holding on the tax piece.

I would reprice to a floor per seller plus a per note fee, because your fixed work is per seller and your variable work is per buyer. And charge separately for tax administration, since that is where the real liability sits.

What does your servicing agreement say about who decides when a buyer is in default? That is the clause I would want nailed down before I ever touched a payment, because the seller wants to act fast and you are the one holding the payment history that either supports the notice or does not. Also whether you are named as the one sending any notice, since notice requirements on installment land contracts differ by state and getting the form or the timing wrong can restart the clock.

Six hours a month for $700 is fine money for a side thing. What happened when someone actually stopped paying, did you keep collecting your $18 while the seller sorted it out or does the fee stop?

Five years into a service business and I will tell you the shape of your problem. You have two customers. One leaves and your revenue halves. Everything you learned this year is worth more than the $700, so go find eight more sellers before you refine the process any further. Also raise your price on the next two and see if anybody blinks.