Buying mortgage notes can provide the savvy investor with secure returns without the hassles of buying and flipping a fixer-upper or locating tenants for a rental unit. When most folks think about mortgage notes they think about industry giants such as Bank of America or Wells Fargo. But individual notes or small note portfolios can also be bought by individual investors to add some high yielding assets to your portfolio. We are here to help you locate the best notes that fit your portfolio, do a workout in case they are non-performing notes and make them generate ongoing cash-flow income for you.
Yes! Your money will grow two, three, or even four times faster than your current investments and you maintain control. Each one of our properties that we acquire is put through a rigorous financial evaluation in order to determine the profitability before the property is purchased. Each note is selected strictly based on your criteria only. Invest in notes and making loans is a business and should be treated like a business. If you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle-free and produce staggering yields.
As the name suggests, non-performing notes are “I owe you” promises secured by real estate where the borrowers have stopped making their monthly payments for various reasons. Investors looking to buy no-performing notes have a variety of strategies available to them. Once the note is purchased, the investor now owns the note, literally becoming the bank. As such, the investor can then approach the borrower directly and offer to work out a loan modification, or in the worst-case scenario, the investor can always foreclose, and either sell or keep the house as a rental.
Notes investing is possible pretty much with any amount but the discounts offered by the banks get higher the larger the investment is. The standard minimum investment for a house flipping project is $100,000 but varies by project. In an ideal case there's only one investor per flip project but we do accommodate multiple investor pools for larger projects.
Yes, making real estate loans and investing in notes is a widely accepted use for IRAs and other Retirement Plans. Maybe your goal is for retirement income. If so, you can purchase a note within a self-directed IRA. That way the monthly note payment checks and interest earned can stay in the retirement account tax deferred or even tax-free with a self-directed Roth IRA.
In order for you to use retirement accounts for loans they must first be administered by a third party custodian. There are several companies our clients have used before. You can visit them on the web at www.SenseFinancial.com, www.QuestIRA.com, www.BroadFinancial.com, www.GuidantFinancial.com, www.IRA123.com or simply google “Self Directed IRA”. After selecting your custodian, you send a transfer form to them, and they’ll do all of the work for you. Once your account has been setup you are ready to buy notes and make private mortgage loans. From there, you simply notify your custodian about the investment you are looking to make and send the check for the gross amount of the loan.
Given that the nation’s housing market is still in recovery mode from the Great Recession, investors looking for different investment vehicles are turning to real estate paper – particularly buying non-performing notes. There are multiple credit unions, banks, hedge funds and private equity firms willing to sell off performing and non-performing notes at significant discounts. Significant discounts means as low as 10 cents to the dollar value for a non-performing 2nd note and up to 90 cents to the dollar for a high-value performing 1st note. There is a note for every investor’s desire out there – we’ll find it for you.