Banking and co

During a conversation the other day, a new Note Buyer told me that he decided to start investing in buying defaulted mortgages. He had been wholesaling properties for a very long time prior to this.

When he said to me “Dean, the reason why I want to get into buying defaulted mortgages is not only for the cash flow, but I want to keep these people in their properties. This is what worried me.

Don’t get me wrong. I’ll be the first to admit that Humanity counts. But…

Don’t forget about the bigger picture here.

One Exit Strategy Is Not Enough When Buying Defaulted Mortagages

It will not work.

A SINGLE exit strategy for the defaulted mortgages that you buy may be what you want to pursue. (in this example he was looking to hold all the notes as cash flow by modifying them and getting them to re-perform).

Buying Defaulted Mortgages: Multiple Exit Strategies Are Needed

If you want to be successful in your investments in defaulted mortgages, you need to be like Rafael Nadal.

Nadal can do it all. He has a great serve, an awesome forehand, and can play an excellent game on both the grass and clay court.

You should follow the same idea when buying defaulted mortgages. Pursuing multiple exit strategies will make your note buying business more profitable.

Be careful you don’t “stick yourself” with one note buying strategy.

Buying Defaulted Mortgages – Using Foreclosure as a Tool

When trying to modify a loan, sometimes the only way to get a borrower to cooperate with you is to start the foreclosure action.

And Why?

Because for someone who has been missing payments regularly and hasn’t been current for a while, sometimes a wake-up call with a foreclosure notice (combined with a helping hand from you to help them with a loan modification) is what prompts them to get their act together, take control of their situation, and to work their way out of their delinquency.

Be careful not to fall into the same trap as the investor I talked to.

1 Exit Strategy for your Defaulted Mortgage Buying business will not work. It will not be enough to make you successful.

You really need to be a jack of all 5 Exit Strategies to do well in the note buying business.

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