Cash flow without tenants
If you're excited about the opportunity of investing in RE mortgages Notes but concerned that you're going to miss out a chance to invest, I've got good news for you.
Investors can use Individual Retirement Account money to invest in Mortgages Notes
Mortgage Notes are Perfect for Retirement Investing
Secure Retirement
Investing
Investing into mortgage note ensures cash flow without the hassle of tenants ,toilets,trash & termites. The process is too complex to cover in a few short paragraphs, however, the profits on the mortgage notes investment are rolled back into your IRA tax-free. If the IRA in question is a Roth IRA, the money is also tax-free when withdrawn at retirement.
If investing in real estate is too much work, as I would assume it is in
retirement, You have the ability to use your Retirement Investing to passively
invest in the lucrative real estate market, protect the “corpus” of your
estate, and realize tremendous growth with great cashflow in your retirement
investment portfolio.
I made the switch from a Landlord to a Lienlord and i would rather collect a mortgage payment than a rent check any day!
once i learn the power of discounted junior liens , i started a fund to create more purchase power & generate higher profits
My fund currently invest in Junior liens with the senior lien performing. this way we know the current home owner wants to stay and your only job is to get the note to perform. when i first started it seemed to risky and i had my doubts until i tool action and bought my 1st note. That was over a 18 Months ago now i collect monthly cashflow from my pool of notes without any nonsense of dealing with the contractor , home inspection and the rest that goes with being a property manger. Now i think and act as the bank instead of the RE investor :)
Comments (4)
Hello Yulissa, when you foreclose from 2nd position you take title to the property subject to the senior lien of course, but once you evict the tenant your now the owner & can now rent the property and collect rent until the 1st mortgage foreclose on you or you can choose to reinstate the 1st and Earn the difference of what you collect and have to pay to the 1st . Also lets not forget the borrower still owes you the money you can do for a default judgment and sell that unsecured debt @ 0.05 the dollar. That's just one way to look at it. Another example would be if you got wiped out in a BK and the the 1st Foreclosure and there was no equity then your loss is your gain :) Now i am not giving legal or accounting advice here but if i bought a no equity junior lien for $6,000 with a face value of 30k and got wiped then my loss becomes my gain especially if i bought 8 notes in a mini pool and sold some off and made profits , that loss of 30k now helps me. In fact we love BK & foreclosure:) But i would not tell you to buy no equity liens unless you have the experience. I will tell you from my experience 2nd's have more diversification and a cheaper price point. This helps when evaluating Risk factors. Everything has risk, its learning how to leverage that keep you ahead. There are so many other way but to much to type. If you or anyone reading this Blog have interest in learning more about 2nd's email me [email protected] and i will send you webinars that i have done about junior liens that may help you under stand more
Fuquan Bilal, almost 11 years ago
Hi Fuquan If I understand correctly if you have to foreclose in a no Equity loan, then you are at a loss since these are junior loans, what are other risks in your model if any?
Yulissa Candiotti, almost 11 years ago
We buy from other larger hedge funds that purchase in bulk from the Big Banks(Wells,BOA,Chase) anywhere from 2% to 5% of the loan amt and resell to us for a few cents more. We are able to workout a deal with the borrower because we buy at a discount and we can help the borrower by offering a Discounted Loan Payoff, Reinstate Loan,Payment Plan,Refinance,Seller Assistance,Deed-in-Lieu of Foreclosure & the list goes on. We created a fund (506 Reg D) to partner with accredited investors that want to earn higher yields then they are getting now. The loans we buy are partial equity or even no equity loans in fact we are buying more of the no equity loans because we get them at a huge discount and as long as the 1st is performing we focus on the emotional equity of the borrower. The challenge we face is making contact with the borrower but once we do 75% of the loans get Modified 15% we exit by offering a discounted pay off and 10% we foreclose on. If we foreclose then we have failed well at least that's our business model, we don't want the property we want the payment! once the loan is performing we pass it along to a servicer who charges $15/mo to manage the note for us.
Fuquan Bilal, almost 11 years ago
Fuquan - So you are buying non-performing 2nds, where the 1st mortgage is current. Where are you obtaining these notes? What is your typical workout strategy for the note? Are you saying that you have a fund that pools money from private investors in order to purchase these NP 2nds? Thanks.
David Beard, almost 11 years ago