Are You Buying Notes and Deeds? SpendMeNot has some housing statistics for 2021: “Moratoriums on foreclosures (have been) in place due to the ongoing pandemic, and they’re artificially depressing the number of foreclosures. The number of mortgages in serious stages of delinquency is actually five times higher than a year ago.”
If you’re a real estate solutions company buying properties for cash, are you buying notes and deeds? You can add an arrow to your quiver by buying notes and deeds. They can be far more profitable and less stressful than stocks and real estate investment in physical property.
As the dust settles from the sorrows of the pandemic, government agencies sell delinquent notes to big institutional investors like Lone Star Funds, Goldman Sachs and Fortress Investments, as well as some community nonprofits, in bulk. The agencies have sold more than $28 billion in distressed loans since 2012, according to government data. The selling of delinquent notes and deeds presents an opportunity for knowledgeable investors.
You can become the bank and service the notes and deeds yourself or hire a third-party servicing company that also deals with late pays.
First, Let’s Define Some Terms:
The Deed is a legal document that gives rights to something. In real estate, a Deed transfers title of ownership and gives the new owner the right to use the property.
The Note (or Promissory Note) is a contract where a party makes a promise to pay a sum of money to another party under specific terms. In real estate, the Note is the legal document that binds the borrower to repay a mortgage loan. This agreement will contain important loan specifications, such as the loan amount, interest rate, due dates, late charges, and the terms of the mortgage.
Hard money lenders, individual investors, and community banks can auction-off or sell-off mortgage notes (the notes can be current or in various states of default)
Individuals can bid on and purchase these notes, and start receiving payments from the borrowers
A recent example: A note on an Atlanta-area home was being sold for $24,360; according to estimates from Zillow and local agents, its market value was between $50,000 and $70,000.
Some back taxes were owed, and a payment history showed that while the homeowner was making erratic or partial payments on her $500 monthly mortgage, she hadn’t quit. She had some equity built up in the house, another sign of commitment.
For more information on How to Buy and Sell Notes and Deeds, attend one of Paige Panzarello’s classes on Building Wealth with Notes Workshop. You can register for her next class, go online for training, or listen to these powerful podcasts.
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