No tenants, toilets or trouble. Some investors are active and some are passive. I personally enjoy buying mortgage notes / trust deeds and holding the paper instead of the property as a passive investor. Acting as the bank and collecting interest leaves someone else in charge of the property management, vacancy and phone calls and possible lawsuits. Holding trust deeds / mortgage notes pays me 12% annually and there is no maintenance through the servicing center I use.
Amen Brother, I agree! Although 12% is on the low side in today's market.
sounds like a good plan to me! I like to owner finance properties so that the end buyer takes care of the house. It's much easier than dealing with tenant issues.
I was at a local NJ REIA meeting last week, there was a gentlemen (realtor), he was representing a investor that had a large portfolio of mortgage notes. After talking to him for a while he showed me a list of about 30 performing notes the investor was trying to liquidate. I don't have enough capital (yet) to invest in notes but it seems like a solid method of getting consist returns.
@Bob Malecki , if 12% is on low side for performing, what do you typically see?
@Donald Placide , was the realtor's client only willing to liquidate the entire portfolio? If so, do you recall what the asking price was? If you're still in contact with the realtor--and his client would consider a smaller sale--I don't know whether we'd run afoul of BP's policy about "hawking" products, but I'd like to chat with him about that.
@Jim Farrell I think the client from was liquidating a small portion of his portfolio. most of the notes were under 30k and in southern states. I still have the realtor information just send me a private message.
Are you creating your own paper or buying existing SF or institutional type loans?
I could not agree more. I started 20 years ago and never could justify buying properties as the return for your time and risk are better IMO.
The discounted yields on SF notes seem to range from 8% into the 20's and up. Institutionally created notes have a different set if issues to contend with so I can't speak to them.
Originally posted by :
, if 12% is on low side for performing, what do you typically see?
Well, on NPLs that we get reperforming, 30-90% annualized ROI. On buying performing notes, 20-41%. Buying them at a good discount will generate a higher annualized yield.
Awesome returns! I'll give you a call tomorrow to see if there are any synergies between our companies. Thanks Bob!
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