Mortgage note investing is one of the more intriguing passive real estate strategies for investors. Daphne Wilson is a pro at finding and buying second mortgage loans. She’s devised a strategy that allows her to buy for pennies on the dollar and create a win-win situation for borrowers. She is the founder of Bell Financial and on this episode, she shares her strategies to find and buy notes and get a delinquent borrower current on their payments.
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Key Market Insights
- Mortgage note investing is real estate without property management
- Homeowner pays the investor instead of the bank
- Notes are available through note exchanges, note brokers, and organizations
- Where to find notes to purchase: LoanMLS and ExchangeLoans
- First position loans are senior liens
- Second position loans are junior liens, usually less than the senior loan
- Buys second mortgages, these are typically for home renovation loans
- Spends $2,000 to $8,000 per asset
- Unpaid principal of $25-$60k for non-performing notes
- Banks would rather have bad loans off their books than try to collect the full amount owed
- Strategy: Buys delinquent 2nd mortgage behind a current 1st mortgage
- To get borrowers current on their mortgage, create a solution about the borrower
- Use the arrears to create leverage
- Spend 4-5 hours per month on note investing business
- When purchasing a non-performing asset, you build a relationship
- Arrears are the amounts that have accumulated because of missed payments
- The 2008 market correction fueled the second mortgage investing space
We’re going to jump right into the bullseye round, right after this quick word from our partner.
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Bull’s Eye Tips:
Winning Your Market: Engaging with other investors
Tracking Market Changes: Reaching out and interacting
Daily Habit: Meditation
Resources:
LoanMLS.com
ExchangeLoans.com
Digital Resources:
Tweet This:
“In 4 years I have never had to foreclose on a buyer”
Places to Grab a Bite:
West Palm Beach – Darbster
Connect with Daphne:
Instagram: daphnerwilson
Website: Mortgagenoteinvesting.info
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