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.

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

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.