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Mortgage Defaults Redefine Investment Landscape
The rise in foreclosure has crippled our nation. Mortgage money for worthy buyers is becoming increasingly harder and harder to find.
My perspective from my very own little real estate investing corner of the world is that our industry is in flux. Soon, we investors will be forced to take a long hard look at our investment strategies and expectations.
In my opinion, the term real estate investment is ripe for reevaluation. This “re-casting” of our investment criteria and objectives should begin with investor education and enlightenment. Not the same old re-hashed and re-packaged the-same-way-to-accomplish-same-thing-but-different education, I mean real content, cutting edge knowledge, new and exciting ways to profit.
Because a wise man once told me, “you don’t know what you don’t know”.
When education is combined an investors desire to succeed the result is a quick and profitable ascension to the top of their given field or specialty. Educated investors have the ability to think in a disciplined and rational manner, they learn how to dispose of problems quickly, and gain insight into proposed transactions that other less educated investors might fail to recognize.
I believe that most educated investors continually seek and find their best deals within a space I refer to as “Defaulted Investment Opportunities”. All any investor needs to do to gain access to this lucrative niche market is to study and become educated in “default”.
Default Investment Opportunities become available whenever a borrower fails to make their regularly scheduled (usually monthly) payment to their mortgage lender. However, this default doesn’t become public knowledge until the filing of some version of (depending on the State) a notice of default or Lis Pendens.
Within Defaulted Investment Opportunities lie some of the most outstanding real estate investments available; short sales, foreclosure purchases, lease options, subject to; all made available or become greatly enhanced (potential profits) because of the default.
However, all other proposed investment opportunities (and I do mean each and every one) absolutely pale in comparison to, what in my opinion is, the most profitable and viable investment opportunity available. The purchase and profit from investing in institutional defaulted mortgage notes.
The market for this investment was hot in 2000 when I first started investing in defaulted mortgages, but now, in 2009 it’s ON FIRE. Lenders are selling short and taking huge discounts on final judgments at foreclosure auctions. All are indicators of how badly lenders what to sell their defaulted mortgage notes.
Wall Street, Sub-Prime Lenders, and Hedge Funds they’re all here, chasing this investment opportunity; however, I am of the opinion that the true opportunity comes a bit farther down the line from these mega money machines; and it also comes with a new perspectives and a refreshing money-making concept.
The next time a potential investment comes across your desk, think how you might fare if you were able to purchase the note instead of your running the deal through a tired and well worn deal analysis model.
Rich Meyer is a national speaker and trainer on Default Investment Opportunities. He has participated in thousands of real estate transactions; from foreclosure auction purchases and loss mitigation to delinquent note and mortgage investments including extensive foreclosure and civil litigation.
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