The Sweet Spot For Note Investors

When is the sweet spot for note investors to engage in the market?

There are specific moments each year where it may be extra advantageous for mortgage note investors. That doesn’t mean they should neglect consistency, or try to time the market though. Yet, these opportunities and their impact shouldn’t be ignored or overlooked.

Tax refund season in particular can be one of these sweet spots.

There will always likely be a sizable portion of those receiving income tax refunds who just see their refund check as their chance to go on an annual shopping spree. They pack out local tattoo studios, create lines at used car dealerships, splurge on phones, and more, which often make all of those items terrible buys at this time of year.

However, there are an increasing number of individuals who recognize the huge opportunity that their IRA tax refund provides - by presenting the chance to really change the dynamics of their finances for the long term. That can be by starting to invest in real estate or mortgage notes for themselves. For many others it is getting a handle on their personal finances. This may be paying off high rate loans. Or it can be getting back on track with their housing payments. Some will use their tax refund as a down payment on a new home. Others will be catching up on payments.

This is a great time for current non-performing mortgage note investors who just got their hands on some nicely discounted non-performing mortgage loans. Then the tax refunds start rolling in for their borrowers. With home equity up, homeowners really don’t want to lose their properties right now. That refund money can be used to catch up payments, reinstate loans and save homes from foreclosure, pay down mortgage balances, or to fund a move to somewhere more affordable, while enabling a sale of a current property.

These are all great things for mortgage note holders. Those with great loan servicers, can find they are quickly releasing and creating new value in mortgage notes. Some may be paid off for more than expected. Others can become performing and start delivering great cash flow, when previous note holders had given up hope.

This sweet spot may get even better in many segments of the market thanks to the new tax bill, and the supersizing of child tax credits.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund