Category: Investing

One of the initial crossroads new note investors face is determining their level of comfort investing outside of their own backyard. There is something reassuring about residing within driving distance to your investment property with the flexibility of driving to it at a moments notice. However, did you know there is actually much more opportunity available when investing outside of your own backyard.

ThinkRealty.com gives a great explanation as to why you should reconsider investing outside of your own backyard : https://thinkrealty.com/note-investing-from-afar/

For example, look at the stock market. If you limited yourself to purchasing stocks from a company within driving distance from your home then you are missing out the thousands upon thousands of investment opportunities available.

Unlike notes, stocks are a very risky investment and typically are directly correlated with the rise and fall of the economy. ThinkRealty.com explains “which would you want to own: a stock secured by a company’s assets in which you are the last to be paid off (assuming there is any money left), after bondholders and owners of preferred shares, and you share third position with hundreds of thousands of investors? Or would you rather own a note secured by a house in which you are the first to be paid off and you share that status with nobody?”

Purchasing/managing/selling distressed notes allows a great opportunity to negotiate with investors, get creative in your exit strategy, work with the homeowner… stocks do not offer this type of flexibility 

Additionally, look at these trying time our economy is currently facing. The stock market and many other investment industries are on the fence and we are uncertain which way the economy will tip. With the note industry, we are not directly effected by a downturning economy.

When you look at your note investment less like a “real estate” purchase and more like a “stock purchase” you see that it actually should not matter the location of the property. The responsibility of maintaining the home can be place in the hands of your selected note servicer or vendor. You will open up the door for many many more opportunities which, in turn, should propel your investments. 

To receive the largest ROI, we tell our customers time and time again that you need to get out of your comfort zone and start investing outside of your own backyard. For example, Fannie Mae and Freddie Mac sold $22.2 billion in Non Peforming Notes during the first half of 2019. Nearly half of these loans were located in New Jersey, New York, and Florida. If you live in any of the other 47 states right now there is ample opportunity for investing nationally.