According to USA Today, “The COVID-19 pandemic has sent shockwaves through the American economy. Millions of Americans are filing for unemployment benefits every week. Small business owners see plummeting revenue, and many of those who are still working have been forced to accept pay cuts. And now, many Americans are unable to afford housing and basic necessities.
A U.S. Census Bureau survey conducted from July 2 to July 7, 2020, nearly 43.4 million Americans, or 25.3% of the adult population, either missed last month’s rent or mortgage payment. They also have little to no confidence that they can pay the next month’s rent or mortgage on time. However, the share of adults who cannot afford to pay their monthly housing bills varies considerably from state to state.
While economic downturns can present Americans of all income levels with financial challenges, these hardships affect lower-income Americans disproportionally. Lower-income Americans typically have to spend a larger share of their income and, as a result, are less likely to be able to save and prepare for an economic downturn. Many of the states where the largest shares of adults cannot afford to make housing payments are also some of the country’s poorest states.
This sad state of affairs, some say, may get worse after forbearance runs out for many Americans by May of 2021. Next year mortgages move from delinquent to foreclosure. The notes on those properties may be offered to investors by banks.
Real estate note investing is acting as the bank and receiving payments from borrowers on notes secured by property in its purest form. The critical point is that these notes are backed and secured by underlying collateral in real estate, which provides a secured investment, unlike stocks or mutual funds. Additionally, note investors don’t have to worry about the maintenance and repairs on a property.
Additionally, real estate notes can be purchased nationwide, regardless of where you currently live. However, licenses may be required in individual states to invest in notes within that state. Real estate note investing attracts many investors due to the above-average rates of return. In addition, notes offer superior flexibility and an additional benefit of helping families stay in their homes, which would otherwise be foreclosed on by the big banks and financial institutions.
Many note investors have a great feeling of satisfaction when they can help homeowners stay in their homes through some loan modification. Unlike big banks or financial institutions that are hamstrung by red tape and government and corporate regulations, individual note investors can offer favorable terms and even debt forgiveness while still hitting above-average return rates. You can accomplish this simply because non-performing notes are sold at a discount. As a note investor, you can create win-win situations for all parties involved.
Since a real estate note investor is essentially the bank, they can choose how they would like to proceed with their investment. Real estate note investing provides the ultimate flexibility across all niches of real estate investing. You want as many options and exit strategies as possible when you purchase an investment, where real estate note investing excels. There are four main niches that real estate investors fall into:
Paige Panzarello, the “Cashflow Chick,” Founder of The Tryllion Group, Investor/Entrepreneur having done $150 Million+ in real estate transactions; Specializing in Non-Performing Notes. She has been a regularly featured guest on “The Cashflow Guys” podcast, and you can also find her on many other Real Estate and Entrepreneurial podcasts, and in the Wall Street Journal as well. She also speaks at various Real Estate Investing clubs and conferences across the country. Paige teaches the “Building Wealth with Notes” Workshop that drills down into the details of how to successfully buy Non-Performing Notes, create passive income, and mitigate risk. www.CashflowChick.com/training
Surviving the crash of 2007, Paige knows how “life happens” every day. Her passion is to help people build wealth, secure their financial future, enjoy life, and be ready-not broken! Whether it is improving communities one house at a time, assisting borrowers in staying in their homes, or working with other investors to learn a new way to earn higher investment dollars for their retirement years potentially, Paige dedicates herself and her business to helping people improve their lives in every way. For more information got to www.CashflowChick.com