Is the risk lower for hard money lenders? Most of them require 35% or more down. But in the case of foreclosure, is the legal proceedings expensive?
No court involved not expensive, just takes time
How do you invest in first trust deeds?
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There are funds that pool money from individual investors and lend out hard money charging 10 or 12%. Bruce Norris down in SoCal has a fund like this.
Another way is to buy discounted mortgage notes. These are not hard money per se but these notes may not be the usual Fannie Freddie type loans. I remember there’s a site called LoanMLS that lists these notes. There may be other sites like that.
They are pretty common with land. Land is harder to finance, so seller financing or land contract is more common. Sometimes the seller wants their cash and will sell you the contract for the payments.
Discounted mortgage notes seem to be a gold mine for profit. You can buy the mortgage note at huge discount and then foreclose the property and acquire some good land or houses.
The hard part is where to find such deals and how to properly evaluate the underlying property and the legal or procedural risk.
They are super rare in a world where Freddie, Fannie, and FHA control over 90% of the mortgage market.
You can buy all sorts of bad debt though at pennies on the dollar. It usually gets sold in bulk without seeing what it all is. Then you need a process to collect a higher percent than you paid to acquire it.
Debt collection is never a easy thing to do. Bad debt even harder. Just think about how cumbersome an eviction process is, and your deadbeat tenant isn’t even owing you that much money.
Stick with accumulating assets (stocks, real estate) and wait for them to appreciate.
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I guess foreclosure is much easier than eviction in just cause eviction cities.
Yeah, simple buy and hold is the worry free life. No need to get yourself into complicated troubled life. Let others to deal with the crap, enjoy your life with a simple and easy buy and hold
Think again. I’ve been to the court steps a lot and most houses lender trying to foreclose on sit around and get postponed all the time…
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I guess foreclosure is postponed by the default homeowner who uses all the available legal loophole to hold on to their house as long as possible. I know some foreclosure takes 4 years
That’s right. Owners can also declare bankruptcy at least 3 times to avoid being kicked out. Legal process is long and brutal. Good luck with your money sitting there waiting… Extreme patience is needed.
A few deadbeats make all of us to pay for their badness. Canadian mortgage rate is so much lower than our ARM rate. I would approve to remove excessive legal loopholes.
I invest through a broker. Send me a PM
Mini crashing!!! 
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That’s why, I work with IULs, a conservative approach to retirement. 7%-16% returns lately. Your $ is never lost, you get 0% in returns if the market crashes.
The beauty is that you have 12 buckets where the insurance companies deposit the returns every month. You may have earned 7% for 11 months, then the market crashes, you get the 12th month as 0% with a yearly average of 6.4%. Tax free. 401Ks and everything else? They go down as deep as the ship sinks.
None the less, that money was already used by you. It’s called the leverage of your money. $4K in, $3K out to pay a mortgage, but you still keep your $3K earning the aforementioned returns 7%-16%. Historically, 7%+ during the last 20 years.
I wouldn’t believe what they say about the stock market, say it will never crash because of a strong economy. This market is at the wimp of speculation. Imagine many companies besides Walmart reporting bad returns, man! Sell baby!
If you know your game, be positive, learn and adapt. Negativity when it comes to see other ways to make your money work doesn’t belong to anybody who calls himself an investor. It has been proven many times.
More lies from @buyinghouse ignoring the interest charged to borrow your money back. You actually net a 2% return. Return can be negative in years the stock market returns less than 5% which is 40% if the time.
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While many have warned that faster inflation could hurt stocks, in theory bigger price gains should be at worst neutral, if they boost earnings along the way. Higher real yields, on the other hand, mean a bigger discount rate to value future earnings. Should they break out of the range over the past five years as investors anticipate greater central bank policy normalization, that could hit stocks harder, according to the Morgan Stanley thinking.
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We still don’t have faster inflation. Core CPI is still showing <2% inflation.
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It’s beginning to look like Christmas!
Thanks God my clients are protected from whatever in the future.
