Guest blogger Scott Carson: Three Reasons Why Non Performing Notes Perform Better For Investors

Real estate investors who are used to the fix and flip game often have a hard time wrapping their head around why non performing notes are something that they should spend some time looking into for their real estate investments.  I’ve been buying NPN’s since 2007 and I truly believe that they are still the best investment for investors.  Here are the three main reasons why I love note investing.

  1. First and foremost, we are all looking for deals!  At the peak of the mortgage meltdown there were over 15 million homes underwater.  As of today, there is still somewhere between six and seven million homes still underwater.  If you add in the two to three million loan modifications that were performed where the banks only reduced the interest rate for a fixed period of time (that are now starting to default), that leaves you with around eight to ten million deals to tap into. So many investors are used to sending out postcards, yellow letters, working the MLS or door knocking for one deal from one source.  I’d rather work smarter and reach out to banks and hedge funds that have hundreds of deals on their books that they are looking to get rid of.  What would you rather do, tap into a continuous source or keep hunting for the next deal?  Add in the fact that note investors are tapping into deals six to twelve months ahead of other investors by buying the distressed debt, and you’ll understand why note investors are tapping into great deals.  The inventory is there while it’s drying up for those REO buyers who are waiting for inventory that is never going to show up.
  1. With us taking over the distressed debt when we buy a NPN, the banks are willing to sell these assets often at a steep discount.  Depending on location, foreclosure time frame, market values, and condition of the property, you can often pick up NPN’s and control the underlying real estate at a steep discount.  These steep discounts are often well below what a traditional fix and flipper or landlord will pick up a property at.  With discounts ranging from 25 to 75 percent off of current market value, you don’t have to mathematician to realize that you better pricing often leads to a much higher ROI for you or your funding partners.
  1. Exit Strategies. Many “traditional” investors are looking to buy real estate for cash flor or to fix and flip for bigger pay checks.  With NPN’s, you have so many options with numerous exit strategies.  As a note investor, we are looking to rehab the borrower and not the property.  You can wholesale notes, reinstate the loan, modify the loan, offer a loan assumption, short sale the property, offer a deed in lieu or cash for keys, get a cash payoff, or last but not least, or foreclose on the property.  You can also sell off your note to other investors after doing some work on the asset or getting the loan to re-perform for a period of time.  There are also several government incentivized programs for note investors that other investors do not have access to.  Note investors often prefer to end up with cash flow on notes and avoid the problems of dealing with toilets and tenants that landlords have.  When was the last time you called your bank when your toilet clogged or your air conditioner went out?  Never!  Keep in mind that there are servicers, property preservation companies, realtors, and real estate attorneys all across the country to help you with your note deals.  You don’t have to or shouldn’t be a “one man band” when it comes to being an investor.  Let the professionals do their job and you enjoy being an investor and not a rehabber or landlord!
Posted in Special Pricing

Free Webclass Saturday 10/21: How to Prosper in the 2018 Real Estate Market

I’ve had a crazy number of requests to somehow do the 3-hour “market update” class that I’ve been presenting live as an online class for people who don’t live in the area or who couldn’t get to it on a weeknight. After much scoffing about the idea that ANYONE was going to watch a 3-hour online class, I realized that if I worked at it, I could probably get it down to TWO hours without losing much content, and then I thought, “Well, it WOULD be interesting to see if people can actually pay attention to an online class for 2 hours” and once I have the thought that something is interesting, that’s pretty much it for me.

So Saturday morning from 9-11 eastern, I’ll give a condensed but still useful version of said class, where I’ll cover where we are in the market cycle, why there won’t be a real estate bubble (but could be a downturn) in the next 12 months, how to make a lot of money if that happens, what to do about the 3 big market challenges (deals, money, labor) in the meantime, and 2 exit strategies that you MUST know.

Register at https://attendee.gotowebinar.com/register/4757126504107815683 and leave a number so we can send you a reminder text!

Posted in Uncategorized

IC Elesson: How to Stop Learning and Start Doing

Does this sound like you? You love going to association meetings and webinars, and hanging out in online fora reading about, asking questions about, and discussing real estate. You own several home study courses. You’ve been to multiple long-form workshops,

Inner Circle e-lessons and all the other great benefits of Inner Circle membership (like weekly web classes, unlimited email coaching, and more!) are, sadly, restricted to Inner Circle Members. To try out the Inner Circle for one month for just a buck, click here.

And yes, I'm trying to get you addicted. And I will succeed.

Current members login here.
Posted in Inner Circle, Inner Circle Page

Guest blogger Jim Aydelotte: Why Lease Options are Great for Beginners

 With increased confidence in the housing market (but still-limited financing available), lease/options and land contracts have come roaring back as and easy and profitable way to buy and sell properties. Jim Aydelotte is an expert in the latter, having completed deals on over $5 million in properties since retiring from his ‘real job’ in 2006. Best of all, he’s a full-time pastor and only works his lease/option business 3-5 hours a week. He’s another featured speaker at the 2017 OREIA National Real Estate Summit, so I hope you’re registered! If not, do it at  www.OREIAConvention.com

Sometimes I would love to go back in time, just to get a chance to do a few things differently than what I actually did…or didn’t do – of course, hind sight is 20/20 right?

That hindsight, and all the things I did BEFORE I discovered lease/options that I wish I’d just skipped, is why I now stress to everyone who wants to start making money in real estate to consider lease/options FIRST. Please understand that this is not a suggestion based on selfish motives, it is based purely on experience.

And the reason why I believe, and am convicted of the fact, that lease option strategies are the absolute best strategies in all of real estate investing for every beginning and seasoned investor to get involved with, is because it takes no capital, very little time, and minimal training, to start getting paid quickly in real estate investing. 

If you were to purchase an average rental property, in a typical neighborhood (let’s say for example a 3 bed, 1.5 bath home rents for $1,200, with a cost of $80,000), and assuming you did not use a private lender (most beginning real estate students do not have those) the monthly payment with a bank using your own credit on a typical commercial loan will cost you about $575/month, plus, let’s say, $200/month for taxes and insurance is a total payout of $775/month.  

Now, that payment has to begin whether you have a tenant lined up or not! But for sake of our example, let’s just say that everything goes as perfectly as possible, and you have a tenant lined up right away. What’s your cash flow in this example?  

Rent at $1,200/mo – $800/mo in expenses = $400/month profit (again, nothing breaks or requires repairs at all in this example).  

That is an annual profit of $4,800 the first 12 months you have a tenant. 

Ok, you get the picture – $4,800 in the first 12 months in profit in our example. 

Let me give you another example. Let’s learn how to locate, talk to, and put a property under contract to control a property.  

Now, finding a seller who is motivated is one thing, but finding a seller who is motivated and getting them full retail price for their property is another! This is the strategy we employ called a ‘Cooperative Lease Option’.

Putting a property under contract for full asking price, with no additional fees to the seller, while placing a tenant/buyer in the property will yield a typical payday of $5,000-$10,000 in the form of an option fee in a very short period of time. 

I have a student who had no background in sales, marketing, or real-estate for that matter, and when he followed the steps I gave him, was paid $6,000 from the day he found and talked to the seller, and 20 days later when the tenant/buyer was placed in the property – and this was starting from scratch with no experience – 20 days for a $6k payday!

But let’s say you need more time to learn these strategies, and to find a property with a seller who is willing to sell their property on contract…and it took you 90 days. 

That’s still more profit, in a quarter of the time as the previous example, on a home you didn’t take title to, or use any money or credit to purchase, and did not have to take time to do any rehab on it. 

This is a strategy that anyone can utilize, and the profits can be so much better, with such little risk, and far less time than the type of real estate deal that most people are familiar with. 

Now you can see exactly why I believe lease options are the absolute best model that anyone can utilize, especially those who do not have the resources necessary to do a ‘traditional’ type of real estate model.

I look forward to helping you get started and succeed at the OREIA Summit. I’ll share more about how these deals work and why you should have them in your real estate strategies toolbag there. 

Posted in Uncategorized

Inner Circle Trashflow Evaluation System Explained

Of all the systems in my comprehensive Real Estate Goddess’s Guide to Real Estate course, the Trashflow Analysis® is the one that I use most often, and the one that causes the most consternation among students. In brief, the Trashflow

Inner Circle e-lessons and all the other great benefits of Inner Circle membership (like weekly web classes, unlimited email coaching, and more!) are, sadly, restricted to Inner Circle Members. To try out the Inner Circle for one month for just a buck, click here.

And yes, I'm trying to get you addicted. And I will succeed.

Current members login here.
Posted in Inner Circle, Inner Circle Page