Keep the Ball Rolling with 6 Creative Exit Strategies

When our clients purchase a distressed mortgage note, they generally have an idea of what they plan to do with the note. However, like with any plan, sometimes things do not pan out as expected. You may not be able to get ahold of the homeowner, you may not be able to come to a financial agreement or you may want to foreclose but after hearing the story of the family you decide to work with them to keep them in their home because you choose the ethical investing route. If you purchase a distressed mortgage note that does not align with your original game plan, there are multiple exit strategies available to keep the ball rolling. After all, you are now the bank and the ball is in your court.

One key benefit when investing in the note industry is you are not “married” to any note. If it is not working you have options…

Keep Circulating Your Investments

If you purchase a portfolio of loans, you might have (for example), 8 non-performing and 8 re-performing loans. Your original plan was to renegotiate the terms with the homeowner, however, you could not come to an agreement with 4 of those loans to start paying again. Now that you have 4 loans that do not align with your initial investment strategy, did you know you actually have the option to put those loans back on the market? You can either sell the loans privately or find a broker to sell the deals for you. When purchasing one of our bank direct assets, it is not uncommon to receive 20-40% ROI. Meaning, you are still potentially able to turn a profit. Whichever you choose, if you play the game right you can grow capital while circulating your investments.

Utilize a Creative Exit Strategy Approach

Before deciding to continue circulating your investments by selling off your loan, you can also choose to take an alternative or unconventional approach.

If you keep up with our educational blog posts, we tend to compare the traditional real estate industry vs. the distressed real estate industry. Typically, a traditional single-family home real estate investor has two main exit strategies. You are either going to decide 1) Am I going to put money into this property and dump a bunch of money with my contractors/construction crew, then renovate this as low as possible so I can eventually re-flip it and turn a little profit, then rinse and repeat and do this over and over again -or- 2) Am I going to clean this property up a little bit and create a rental play as a landlord.

By putting a new spin on the way you invest, you are talking about buying distressed notes (the mortgage debt). Generally, you have about 5 or 6 exit strategies to start with, then there could potentially be more depending on if you are a short-term investor looking for capital growth, or are you a long-term investor looking for consistent passive income.

What creative exit strategies are available to you?

  1. You can try to avoid foreclosure altogether
  2. You can convince the homeowner that foreclosure will affect their credit for the next 7 years, and to avoid it you will rid the debt entirely if they sign the deed over to you. You could even offer the homeowner a first and last months rent at a new place, this is called a deed-in-lieu or cash for keys
  3. You can convince the homeowner that we can do a short sale on the home and approve it within 48 hours
  4. You can give the homeowner a modification that allows them to stay in the home and continue to pay
  5. You can work a deal with the homeowners friends/family members to purchase the home at a reduced payoff, and the homeowner will make subsequent payments to the friend/family member which they will then be off the hook with you
  6. You can work with the homeowner if they went ahead and filed bankruptcy
The Ball is in Your Court When You are the Bank

When you purchase these bank direct assets, you can make these kinds of decisions. The ball is in your court when you are the bank. Furthermore, these are the same offerings that the bank can offer its customers but because they have not set up an infrastructure to carry out loss mitigation and debt collection loans that they originated, it is not in their business model to offer creative financing. The quarterback doesn’t run down the field and catch it. The functionalities are separate. At this point, a firm like Revolve Capital would come in and alleviate the bank’s issue by not being able to collect on a debt that is not paying them. We offer the bank a bump above 0, which clearly is an incentive for them to sell it.

There are a handful of different ways that we can look at buying a mortgage for a steep discount. Depending on which route we want to take, all of those routes mentioned to you are profitable and if you bought that loan for $50K, but it is worth $100K, all of the routes we just walked through would sell that deal for much higher than the $50K price you bought it for.

When you are “the bank”, the sky is the limit because you do not have traditional or expected rules to follow, you can utilize a creative exit strategies… and if you decide the deal you purchased from us is not panning out how you expected there is the option to sell the whole loan (private party or with the use of a broker) and keep circulating your investments, then move on to the next portfolio of assets.

Keep the ball rolling by expanding your note investments. If you’re interested in expanding your note portfolio and utilizing creative exit strategies, get started now by clicking here.

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National Secondary Market Conference & Expo, New York – 2019

MBA’s Secondary Market Conference

We are excited to announce we will be attending the upcoming National Secondary Market Conference & Expo in New York, May 19-22, 2019.

“Attend MBA’s National Secondary Market Conference & Expo to make the connections you need to take your business to the next level. It is the place for wholesale and correspondent lenders to connect, along with lenders and vendors that contribute to the pipeline of selling loans into the secondary market. We bring together the regulators, experts and key industry officials that help inform and educate you on the latest happenings in our industry in order to create the opportunities and inspire the innovation to produce market-based solutions. See the full agenda for informative General Session, break out sessions, networking events and more.

Who Should Attend: industry leaders and decision makers from residential and capital markets, including CEOs and senior-level executives, mortgage investors, investment bankers, rating agency professionals, risk managers, mortgage lenders, mortgage insurers, FHLB members, regulators, REITs, wholesale, correspondent and retail production executives, buyers and sellers of distressed assets, mortgage brokers and warehouse lenders.”

To purchase your tickets, please visit the Mortgage Bankers Association registration page by CLICKING HERE.

IMN: NPL Notes & Default Servicing Forum (West)

IMN Notes & Servicing Forum

We are excited to announce we will be sponsoring the upcoming NPL Notes & Default Servicing Forum (West) in Dana Point, California, June 3-4, 2019.

“IMN is excited to announce its 4th Annual NPL, Notes & Default Servicing Forum (West) is returning to Dana Point, CA this June 3-4. Last year’s West Coast Forum welcomed 350+ Institutional NPL & Note buyers and service provider participants as well as 20+ exhibitors/sponsors. The program once again will feature Large Institutional Buyers, Mid-Sized Funds and Smaller private buyers, with scheduled networking activities to meet your educational and networking needs.”

Chaz Guinn, the President of Revolve Capital Group, will be hosting on a panel Monday morning at 9:30am. Guinn will be asking the panel questions about the topic Large Institutional Players: How are Your Strategies Changing as the Expensive Gets More Expensive and the Scarce Gets More Scarce. To view the agenda please click here.

Who Should Attend: Accounting, Bankers, Brokers, Econometric Services, Insurance, Law, Lenders, Mom & Pops/Fix & Flippers, Property Analytics, Property Auction, Property Broker, Property Management/Property Management Services, Rating Agencies, Single Family Investors, Single Family Owners/Operators, Service Providers/Vendors”

To purchase your tickets, please visit the IMN’s registration page by CLICKING HERE.

Put a New Spin on the Way You Invest – Transition Into Notes

Buying the Debt to the Property

When you think of traditional real estate investing what benefits come to mind? Some might say cash flow, long-term financial security, and gradual appreciation to name a few. Depending on your own experiences you may think traditional real estate is a gamble. Although traditional real estate investing has become a mainstream method of capital growth there may be drawbacks and limitations. Most likely there will be an increase in liability and duties as well as unforeseen expenses. While you do have the benefit of being your own boss, your schedule may become more demanding than a typical 40-hour work week depending on the particulars of the property. Not to mention that no two investment properties are the same, there will always be new surprises.

Transition Into Notes

In our opinion, buying the debt to the property (notes) vs. purchasing the property is a more profitable and scalable play. When you purchase the debt, you become the bank. This spin on investing allows you to decrease liability while increasing the amount of exit strategies available to you. It’s important to remember that a national note portfolio can be managed from the comfort of your home or office. Should an issue arise, our network of nationwide vendors are available to assist you.

Another key reason to transition into notes are the substantial discounts and their obtainability. On average distressed mortgage notes can be purchased at 40-50% discount off market value. Also, the distressed note industry is not dependent on a thriving economy. If our country were to have another recession there would actually be more inventory for you to choose from.

In conclusion, converting your assets from traditional property investments to distressed mortgages is beneficial for many reasons. You will have less hands-on work with the ability to utilize our nationwide vendors. This allows you to work from the comfort of your home or office. Liability will decrease and your ROI will increase. Note investing will increase your exit strategies (long and short term options). Becoming the bank and acquiring the property with 40-50% discount off market value. Notes are not dependent on a thriving economy, there are pros to an up and down market. We strongly believe if you transition into notes you will find positive results with your investment assets.

If you are a traditional real estate investor, put a new spin on the way you invest. Give us a call and let us help you transition into notes, CLICK HERE.

Auction or Judge gavel on a laptop

Buying Homes at Auction VS Buying Notes

Learn to Purchase Home Prior to Auction

Traditionally, when an investor wants to purchase a foreclosed home they would typically go to the courthouse where homes and assets are auctioned off at discounted prices. Is buying homes at an auction the best method in obtaining an investment property, and more importantly what is the best way to use your resources when it comes to buying homes at auction vs the note?

The all-out craze in buying homes at auction has dramatically decreased since the height of the 2008 residential mortgage crash. The main reason(s), competition from newer buyers and less inventory. Since the foreclosure moratorium of 2010, foreclosures were halted by many lenders so that a less expensive route could be sought after, loan modification. We would recommend learning to purchase the home prior to going up for auction. You can purchase the same piece of real estate for roughly 30-40% cheaper than at auction. By purchasing the actual mortgage note from the foreclosing bank, you could save yourself thousands of dollars by learning to acquire the actual debt vs. the property itself.

Buying Homes at Auction

Buying homes at auction can typically turn a seemingly “smart” investment into a nightmare. How may an investor know the interior condition of the home, prior to auction? He can’t, he must wait until the offer is placed and the bid is accepted to take ownership of the property to eventually get inside. You must fully understand the scope of work the property will need to bring to market, to sell quickly. Therefore, we recommend learning how to buy the same property at auction well before it’s listed.

For example, instead of purchasing a $100k property for $90k at auction, you could learn to purchase the same house for $55-60K buying notes.

Buying Notes

Purchasing a distressed mortgage note enables the investors (like yourself) to purchase homes for a fraction of the price you would at auction, and getting it before it heads to auction. This gives you a greater return on investment with less room for error. Buying notes give steeper discounts and usually provide larger profit margins.  Our sales team has national portfolios ready so you can take the guesswork out of purchasing real estate at auctions, and start buying notes and purchase custom-tailored distressed real estate tapes. Our management team and sales floor are standing by. Please contact us to see what options are available to you.

Take Us for a Spin – Grow Your Distressed Mortgage Portfolio

Key Services to Help Grow Your Distressed Mortgage Portfolio

Revolve Capital Group is committed to providing a simplified purchasing experience to our investors. We offer the following key services that allow you to make the best decisions for your investments when growing your own distressed mortgage portfolio.

Bank Direct Assets – We have direct access to purchase loans that we acquire from Tier 1 Banks.

Access to National Vendors – Our well-seasoned real estate investors can successfully manage their nation-wide portfolios from the comfort of their home or office by utilizing our wide range of vendors.

Completed Due Diligence – We include due diligence documents for each loan, at no cost to you.

Our objective is to assist in the success of your distressed mortgage portfolio. The details are what sets us apart from the competition… when it comes to who you choose to invest with, your resources will be best optimized when choosing a company that continuously maintains a strong network of Top Tier banks, national vendors, and stays current on loan due-diligence.

Structured Financial Industry Group – Vegas 2019 Conference

SFIG Conference

“The Structured Finance Industry Group (SFIG) is excited to once again present the largest capital markets conference in the world, SFIG Vegas 2019, February 24-27, 2019, at the Aria Resort & Casino in Las Vegas. The three-and-a-half day program is developed by leaders within the structured finance industry representing the full spectrum of industry participants including investors, issuers, financial intermediaries, regulators, law firms, accounting firms, technology firms, rating agencies, servicers, and trustees.”

“The SFIG Vegas 2019 App is now available to download! Simply search for “SFIG Vegas” in the Apple App Store or Google Play, and download it to your iPhone, iPad, or Android device.”

“Join the online #SFIGVegas conversation and expand your professional network!”

Who Should Attend

  • Accounting Firms
  • Analytics & Big Data Firms
  • Broker-Dealers
  • Commercial Banks
  • Consulting Firms
  • Endowment Funds 
  • Finance Companies
  • Government Entities/Regulatory Bodies
  • Hedge Funds
  • Insurance Companies
  • Technology Companies
  • Law Firms
  • Mutual Funds
  • Originators
  • Pension Funds
  • Rating Agencies
  • Retail Banks
  • Servicers 
  • Trustees

To purchase your tickets, please visit the SFIG Vegas 2019 Registration Page by CLICKING HERE.

Banker Counting Cash Money

Are You Losing Profits Due to Low Quality Assets?

The Importance of Quality Assets

At Revolve Capital Group, we receive questions regarding the benefits of purchasing bank direct assets. What exactly does it mean to have a bank direct asset? How can you, as an investor, benefit from purchasing a bank direct asset?

The further you are removed from the bank that originated the delinquent mortgage, essentially the higher the price point you will be paying for the note. The more it’s been circulated around the marketplace means there are more companies that have their arms wrapped around the files. Most likely, there are fees and costs dumped into the files. If these companies cannot get the result they were expecting in the time frame they were expecting they will eventually sell that deal. They will have to recoup some of the costs they put into it, which obviously would elevate the price point of the deal higher than the original person who bought it.

That charade will continue around and around until eventually a loan gets blown into under your books. At this point, the delinquent loan could either be severely discounted or severely inflated based on how far you are removed from the bank. Being able to get yourself closest to the bank selling loans, delinquent loans, or even re-performing loans will allow you to capture a wholesale price point or as close to a wholesale price point as possible.

Purchasing High Quality Assets through Revolve Capital

One of the benefits that our clients have when choosing Revolve Capital is we purchase bank direct delinquent loans directly from Top Tier 1 banks and sell these same loans to our investors. By purchasing these delinquent loans from Revolve Capital, you have the opportunity to become the bank. This creates a passive income investment play with many more exit strategies available vs traditional real estate investing. For further information on this topic, we have laid out the benefits of converting your traditional property investments to delinquent mortgage loans here: Put a New Spin on the Way You Invest.

Revolve Capital Group is committed to providing a simplified purchasing experience to our investors. For more information, get signed up with us today by CLICKING HERE and learn how we can assist you in growing your investment portfolio.

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Delinquent Loans May Still Be Distressing Housing Industry

Since the 2007 recession, most of America has believed our economy is on a steady incline and we are free and clear of another recession. According to Keith Jurow, in his article written “Why bubble-era home mortgages are a disaster waiting to happen” this is actually not the case.

“The truth is these mortgages are still dangerous and could soon undermine the housing recovery.”

KEITH JUROW

The below chart shows the drastic increase in loans delinquent more than 5 years… Hawaii (for example) once only had 4% delinquency rate went up to 67% in 2018.

His explanation points to factors such as homeowners who stop paying their mortgages without consequences…

Jurow’s claims are strengthened by the actions of Fannie Mae and Black Knight Financial Services. These companies regularly provide delinquency rate statistics, but for the past 2 years, the data has not been provided. The last available stats showed the re-default rates were nearly 40%.

To find out more about why Jurow believes we are only 6-12 months away from another housing bubble, visit his article HERE

The IMN’s 3rd Annual NPL Notes & Default Servicing Forum, Florida – 2019

We are excited to announce we will be attending the upcoming IMN’s 3rd Annual NPL Notes & Default Servicing Forum in Florida this upcoming February 7th thru 8th, 2019.

“IMN is excited to return to Fort Lauderdale, Florida on February 7-8th, 2019, for our next NPL, Notes & Default Servicing Forum. In its third year on the East coast, we look forward to welcoming back large institutional buyers, mid-sized funds and smaller private note buyers to discuss market trends, with new sessions addressing RPL securitization and REO to rental property strategy.

“In addition, we welcome a new crop of servicers and default professionals to discuss topics surrounding foreclosures and default servicing. These fresh supplements to the program and delegation promise valuable opportunities for information sharing and networking.”

To purchase your tickets, please visit the IMN Registration Page by CLICKING HERE.

Freddie Mac Mortgage Rates Raising for Four Consecutive Weeks

According to the HousingWire… “Mortgage rates inched forward for the fourth consecutive week, according to Freddie Mac’s latest Primary Mortgage Market survey. Freddie Mac Chief Economist Sam Khater said the 30-year fixed-rate mortgage increased once again to its highest level since May.”

“Amidst this four-week climb in mortgage rates, the welcoming news is that purchase applications have risen on an annual basis for five consecutive weeks; however, given the widespread damage caused by Hurricane Florence in the Carolinas, the next few months of housing activity will likely be somewhat volatile.”

SAM KHATER

Please click HERE to read the original article.

How to Manage a Successful Out-of-State Investment Property

When our new investors begin learning the many benefits of investing in the distressed mortgage note space, they frequently ask us an important question…

How do I invest outside of my own backyard?

Ethan Roberts has addressed some of the pros about investing out-of-state, and ways to ensure your property is a successful investment decision.

 

Read more now by visiting his blog post HERE.

Welcome to Revolve Capital Group

Revolve Capital Group (“RCG”) is a privately held real estate investment firm located in Anaheim, CA. We specialize in the acquisition, management, and sale of non-performing and re-performing mortgage notes across the United States. Since 2007, our management team has been at the forefront of the U.S. mortgage market downfall. Between 2010 through 2018, RCG’s management team purchased, managed, and sold over 7,500 single family homes and nearly one billion in total debt.

We have experience in many facets of real estate including residential, commercial, multi-family, hard money loans, servicing, foreclosure, bankruptcy, rental, fix/flip, and other alternative real estate investments. RCG executives and board members form a unique team of accomplished professionals from an array of different backgrounds. Including Digital Media Advertising, mergers/acquisitions, IPO, accounting, Triathletes, and life-long entrepreneurs.

Many owners and holders of severely delinquent loans, such as Tier 1 banks, expanded their loss mitigation capabilities over the past several years, and the internal efficiency on managing these loans continues to decline making the sale of these loans out into the secondary market an attractive strategy for these sellers. Larger transactions are often conducted on a negotiated basis with major investment banks acting as dealers and reselling the loans to mid-size companies for a spread. The banks and other institutional sellers also place loan portfolios for sale through an advisory or auction process.

 

However, many smaller investors are unable to acquire product directly from these institutional sellers, either in a negotiated sale or by bidding at an auction, because they cannot meet the stringent buyer qualification requirements of the seller, such as demonstrable financial strength, proof of funds and infrastructure necessary to manage a multi-state portfolio of notes. Furthermore, smaller investors are uninterested in acquiring large portfolios along a broad spectrum of loan characteristics and geographic locations, preferring to focus on specific types of loans (i.e., nonperforming, sub-performing, re-performing, occupied, vacant) or within certain states or markets.  Conversely, many institutional sellers are less inclined to work with buyers interested only in small portfolios with specific criteria.

 

RCG, continues to foster and build strong relationships with Tier 1 banks, GSE’s, Institutional Sellers to build the proper bridge allowing the everyday investor to get into the business of buying, owning, and managing their own real estate portfolio from the comfort of their home or office. We show you the step by step approach of buying, owning and managing notes to accomplish your overall strategy. Over the last decade, our management team has developed one of the largest followings to purchase short or long-term residential note opportunities. Whether an investor is seeking a long-term strategy (Cash Flow) or short-term strategy (Quick Flip), our team has assisted over 10,000 individual investors grow their portfolio from owning one note/property to owning thousands in their portfolio. No amount is too small to invest with Revolve Capital Group. Many of our clients/note buyers, are buying “1-5 notes (monthly)” or buying as many as “50-100” monthly and growing. We encourage you to check out our platform and take the step forward to your future!

24th Annual ABS East 2018

24th Annual ABS East 2018

The conference will take place September 23-25 at the Fontainebleau in Miami Beach, FL. With more than 2,000 investors and issuers already registered, ABS East 2018 is on pace to be our biggest event yet. We’re pleased to welcome back so many leaders in the space and are looking forward to bringing together the biggest and brightest securitization players for three days of non-stop content, networking and deal-making opportunities.

Join your colleagues from across the industry for quality content and expert insights. There is something for everyone at ABS East, which is a testament to our democratic process for selecting speakers that allows everyone to have a voice. Working together with our Investor Advisory Board, which is composed of 18 of the largest and most influential ABS investors, we select only the most high-quality speakers from across the industry.

With an expected delegation of over 4,000 structured finance professionals, including more than 2,000 issuers and investors in the ABS market, ABS East is where you go to get deals done.

Who Should Attend

  • Regulators
  • Fixed Income Investors
  • Issuers Funding via Debt Capital Markets
  • Underwriters/Structurers
  • Rating Agency
  • Analysts
  • Trustees
  • Servicers Technology Platform Providers
  • Analytics Firms