The Original Realty Magazine for Investors
Yes! There are still mortgage note investments out there that still work. Finding them is all about knowing where to look, being able to recognize the diamond in the rough and knowing how to extract value from them.
This is really the perfect analogy for the current real estate and mortgage note landscape. As you know, there are vast acres of land in the world where you can walk, and can step on the most precious and in demand gems and resources. Yet, without a trained eye, you’d never recognize them. Even if you were standing right on them, or even held them in your hand. You have to know what to look for, and how to polish it. Then the returns can be huge.
The reality is that there is no shortage of inventory in the current market. It is true that mortgages, notes, and hard real estate and markets are always in flux. It is even true that some of those with the get rich quick scheme mindset aren’t finding the note deals they were a few years ago. Especially if they are looking in the same hole they mined out then, especially with the big funds who are far over bidding and are grossly overpaying for mortgage notes. All just to keep investor money moving and to try and preserve capital, instead of being aggressive in demanding good returns.
You do have to protect capital, but my investors want profit.
Thankfully, those who haven’t adapted and don’t have a mindset big enough to look at the wider market, or evolve, and aren’t diversified, or don’t know how to operate under new regulations are getting out. That’s great for the industry. It will help preserve its integrity, and leave more room for those who are serious about the long term.
For those who are serious and dedicated to this industry, or who want to stay in and serve their clients well, there is great opportunity. You’ve just got to be flexible, be open to learning all the types of assets that fall under notes and real estate, be willing to explore the whole map, and let your criteria evolve over time.
Most are still stuck in the mindset of a few years ago, when they just got into the market. They are still only trying to chase deals under $100k and in non-judicial states. They are just stuck on that and aren’t learning how to mitigate risk and find profit.
There are still second mortgage notes with lots of equity coverage. There are tapes with incredible discounts. Especially if you can make trades at higher levels. You can still achieve blended discounts of 24 cents or less on the dollar. You can still find notes with big spreads between the purchase price and payoff and collateral value. This year I’ve even found very attractive deals on tax liens.
There are so many opportunities. You may have to change strategies or be willing to learn new ones. I just can’t understand why some people are sabotaging themselves by sitting and waiting on the sidelines. Every market has cycles. It’s just knowing how to navigate them.
I share even more about this in my third book which is about to go live on Amazon. Make sure to get a copy and stay ahead of the market!
Find out more about investing in secured debt and real estate, go to NNG Capital Fund